What is the intention of Jersey Mikes and the Holder regarding compliance with usury laws related to the Note?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
ed elsewhere in this Note; (c) to obtain an official certification of nonpayment (known as a "protest"). Anyone else who agrees to keep the promises made in this Note, or who agrees to make payments to the Holder if Maker fails to keep the promises under this Note, or who signs this Note to transfer it to someone else, also waives these rights. These persons are known as "guarantors, sureties and endorsers."
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- NO USURY. Maker and Holder intend to comply at all times with applicable usury laws. If, at any time, such laws would render usurious any amounts called for under this Note, it is Maker's and Holder's express intention that Maker shall never be required to pay interest on this Note at a rate
in excess of the maximum lawful rate then allowed. The provisions of this Section 11 shall control over all other provisions of this Note, which may be in apparent conflict hereunder. Any excess amount shall be immediately refunded by Holder to Maker, and the provisions hereof shall be immediately reformed, and the amounts thereafter collectible under this Note shall be reduced, without the necessity of the execution of any further documents, so as to comply with the then applicable law, but so a s to permit the recovery of the fullest amou nt otherwise called for under this Note. Any such refund shall not cure or waive any default by Maker under this Note.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, both the Maker and the Holder (Jersey Mike's Franchise Systems, LLC) intend to comply with all applicable usury laws at all times. Usury laws regulate the maximum amount of interest that can be charged on a loan.
Specifically, if these laws would render any amounts charged under the Note as usurious, it is the express intention of both parties that the Maker will never be required to pay interest exceeding the maximum lawful rate. In such a case, any excess amount already paid would be immediately refunded by Jersey Mike's to the Maker. The terms of the note would be immediately revised to comply with applicable law, ensuring the fullest recovery possible under the legal rate.
Furthermore, any refund of excess interest will not waive any default by the Maker under the Note. In determining whether the interest exceeds the legal limit, any non-principal payments (excluding those explicitly stated as "interest") such as late charges, will be considered an expense, fee, or indemnification amount rather than interest, to the maximum extent permitted by law. The term "applicable law" refers to the laws of New Jersey or the United States, whichever allows the greater rate of interest.