What intellectual property, franchise agreements, and area development agreements related to the Jersey Mike's brand were contributed to the Company on December 23, 2019?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
On December 23, 2019, the Parent and its subsidiaries contributed substantially all of their respective intellectual property (IP), including software and all trademarks as applicable (collectively, the Securitization IP), as well as all franchise agreements, all development agreements, and all related rights to develop and expand substantially all franchising and licensing activities with respect to the Jersey Mike's brand to the Securitization Entities.
The Parent and the Securitization Entities entered into a license agreement, pursuant to which the Securitization Entities granted to the Parent: (i) a nonexclusive license to use and sublicense to non-Securitization Entities the Securitization IP in connection with owning and operating the Jersey Mike's restaurants; (ii) a nonexclusive royalty-free license to use and sublicenses to affiliates the Securitization IP as part of the Parent's and each of its direct and indirect subsidiaries corporate names or trade names; (iii) an exclusive, royalty-bearing licenses to use and sublicense the Securitization IP in connection with other products and services; and (iv) a nonexclusive royalty-free licenses to sublicense Securitization IP in connection with granting a license for use and display of Securitization IP in
connection with gift card program. The contributions of the Securitization IP and franchise fees and area development and service agreements are between entities under common control and are recorded at historical cost. No gain or loss has been realized on the transaction.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, on December 23, 2019, the Parent company and its subsidiaries contributed substantially all of their intellectual property (IP), including software and all trademarks, franchise agreements, development agreements, and all related rights to develop and expand substantially all franchising and licensing activities with respect to the Jersey Mike's brand to Securitization Entities.
Following this contribution, the Parent company and the Securitization Entities entered into a license agreement. This agreement granted the Parent company a nonexclusive license to use and sublicense the Securitization IP to non-Securitization Entities in connection with owning and operating Jersey Mike's restaurants. Additionally, the Parent received a nonexclusive, royalty-free license to use and sublicense the Securitization IP to affiliates as part of the Parent's and its subsidiaries' corporate or trade names. The Parent also obtained an exclusive, royalty-bearing license to use and sublicense the Securitization IP for other products and services, as well as a nonexclusive, royalty-free license to sublicense Securitization IP in connection with granting a license for use and display of Securitization IP in connection with a gift card program.
The FDD states that the contributions of the Securitization IP, franchise fees, area development, and service agreements are between entities under common control and are recorded at historical cost, with no gain or loss realized on the transaction. This arrangement appears to be a financial restructuring, potentially for securitization purposes, where the revenue streams from franchising are used as collateral for financial instruments.