In the Jersey Mikes Guaranty and Assumption of Obligations, what is the Franchisor not obligated to recognize regarding transfers?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
e extent that any default under this Agreement constitutes a default under any Franchise Agreement in accordance with the terms of the Franchise Agreement.
- 7.5 No right or remedy conferred upon or reserved to Franchisor by this Agreement is exclusive of any other right or remedy provided or permitted by law or equity.
8. TRANSFERABILITY OF INTEREST
- 8.1 Limitations on Transfer. De veloper acknowledges that the integrity of the JERSEY MIKE'S® brand and the stability of the System and Marks depend on the business qualifications, financial capabilities, honesty and integrity of Franchisor's developers and franchisees. Developer further acknowledges that Franchisor's lack of opportunity to evaluate and approve each potential developer's qualifications and the terms of each proposed Transfer (defined in Section 20) could irreparably damage the System. Conse quently, Developer agrees not to effectuate a Transfer, except as permitted by this Section 8, and in any such case, without Franchisor's prior written consent. Any Transfer or attempted Transfer lacking Franchisor's prior written consent or that otherwise violates the restrictions in this Section 8 shall be ineffective against Franchisor and, without limiting Franchisor's remedies, shall constitute a default under Section 8.
- 8.2 Conditions to Voluntary Transfer of Rights. Neither Developer nor any Principal (defined in Section 20) shall effectuate an Asset Transfer (defined in Section 20) before the first Franchised Restaurant granted according to this Agreement opens for business. Developer or its Principals only may Transfer its rights under this Development Agreement or in the Developer itself, if it also assigns to the transferee all of its interests under each Franchise Agreement entered into according to this Agreement. Any Asset Transfer shall be subject to Franchisor's prior written consent, in its sole and absolute discretion.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to the 2025 Jersey Mikes Franchise Disclosure Document, Jersey Mikes acknowledges that the integrity of the brand relies on the business qualifications, financial capabilities, honesty, and integrity of its franchisees. Jersey Mikes states that they must have the opportunity to evaluate and approve each potential franchisee's qualifications and the terms of each proposed transfer.
Jersey Mikes states that franchisees cannot transfer their rights under the Development Agreement or in the Developer itself, unless they also assign to the transferee all of its interests under each Franchise Agreement entered into according to this Agreement. Any transfer without prior written consent from Jersey Mikes will be considered ineffective and a default under the agreement.
Jersey Mikes may also require the transferee to execute the current form of the Development Agreement and Franchise Agreement, which may limit the term of the transferee's agreements. The transferee may also be required to execute a Guaranty and Assumption of Obligations, and other collateral agreements that Jersey Mikes may require.