For Jersey Mikes, is the Guaranty limited in amount?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. The transferee executes Franchisor's then-current form of franchise agreement, Guaranty and Assumption of Obligations, and other collateral agreements Franchisor
may then require, and each principal of the proposed transferee meets Franchisor's criteria for qualifying as a new franchisee;
c.
- b. If Franchisee is a Business Entity (defined in Section 31), Franchisor will consent to Ownership Interest Transfers among Fr anchisee's original Principals and waive payment of a Transfer Fee and its right of first refusal under Section 19.7 if the Transfer does not result in a Transfer of a Controlling Interest. The transferor shall deliver to Franchisor such doc umentation and information concerning the Ownership Interest Transfer and the resulting ownership of Franchisee as Franchisor may request. The required documentation will include, without limitation, a Guaranty and Assumption of Obligations signed by each Principal who has not previously signed such documents.
Franchise Agreement to the unexpired term of this Agreement and which shall supersede the terms of this Agreement), Guaranty and Assumption of Obligations, and other collateral agreements Franchisor may then require in connection with new Development Agreements and Franchise Agreements;
- (d) Each Principal executes a Guaranty and Assumption of Obligations (Exhibit F-1).
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the information provided does not specify whether the Guaranty and Assumption of Obligations agreement is limited in amount for Jersey Mike's franchisees. The FDD mentions the requirement for transferees and principals to execute a Guaranty and Assumption of Obligations under certain transfer scenarios. Specifically, when transferring ownership interests within a business entity or when a transfer of rights occurs, the franchisor may require the execution of this agreement.
However, the excerpts do not detail the terms of the Guaranty and Assumption of Obligations, such as whether it covers all financial obligations, has a specific monetary cap, or includes other limitations. The FDD only indicates that the franchisor may require this agreement from transferees and principals as a condition of transfer or as part of standard documentation.
A prospective Jersey Mike's franchisee should seek clarification from the franchisor regarding the specifics of the Guaranty and Assumption of Obligations. This includes understanding the scope of the guarantee, any limitations on liability, and the circumstances under which the guarantee can be invoked. This information is crucial for assessing the potential financial risks and obligations associated with the franchise agreement.