How does Jersey Mikes handle accounts receivable that are delinquent?

Based on the 2025 Franchise Disclosure Document, the excerpts provided do not contain specific details on how Jersey Mike's handles delinquent accounts receivable from franchisees. However, the FDD does mention accounts receivable in the context of the company's financial instruments, stating, "The Company's financial instruments consist primarily of cash and cash equivalents (including restricted cash), accounts receivable, notes receivable, notes payable, accounts payable, and accrued expenses." This indicates that Jersey Mike's does have accounts receivable, which likely includes amounts owed by franchisees.

While the FDD does not explicitly outline the procedures for managing delinquent accounts, it does state that all Continuing Royalty Fees, advertising contributions, gift card sales, amounts due for purchases by Franchisee from Franchisor and other amounts which Franchisee owes to Franchisor shall be paid through an automatic clearing house (ACH) account. This suggests that Jersey Mike's uses an ACH system to collect payments, which could help minimize late payments. The franchise agreement also stipulates conditions under which the agreement can be terminated due to franchisee default, including insolvency or failure to operate the restaurant, which could be related to financial delinquency.

To fully understand Jersey Mike's policies on delinquent accounts receivable, a prospective franchisee should ask the franchisor for detailed information on the following:

• Specific procedures for handling late payments from franchisees.
• Late payment fee policies and interest charges.
• The process for resolving disputes related to outstanding balances.
• Any specific software or systems used to track and manage accounts receivable.
• Historical data on the frequency and amounts of delinquent accounts.