For how long after the termination or expiration of the Jersey Mikes franchise agreement is the franchisee (Developer) prohibited from engaging in a competitive business?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, Franchisee covenants that except as otherwise approved in writing by Franchisor, neither Franchisee nor any of Franchisee's immediate family members shall, for period of two (2) years after the expiration, Transfer or termination of this Agreement, or if later, the date upon which Franchisee complies with the covenants of this Agreement, regardless of the cause of termination, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, limited liability company or other entity, own, maintain, engage in, or have any interest in any business
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, a franchisee is restricted from engaging in competitive business activities for a period of two years after the termination, transfer, or expiration of the franchise agreement. This restriction applies regardless of the reason for termination.
Specifically, the franchisee (including their immediate family members) is prohibited from owning, maintaining, engaging in, or having any interest in any business that specializes in the sale of submarine-type sandwiches or prepared food products similar to those sold within the Jersey Mikes system. This restriction applies to activities conducted directly or indirectly, whether for themselves or in conjunction with any other entity.
This non-compete clause is in place to protect Jersey Mikes's confidential information, training, and the operational, sales, and marketing methods that franchisees receive. The agreement acknowledges that franchisees gain valuable knowledge that could be used to unfairly compete if not restricted. The two-year period is designed to prevent franchisees from immediately leveraging this knowledge to the detriment of the Jersey Mikes system.
It's important to note that this restriction begins either after the expiration, transfer, or termination of the agreement, or, if later, the date upon which the franchisee complies with the covenants of the agreement. This means that if a franchisee is in violation of the agreement at the time of termination, the non-compete period may not begin until they have rectified those violations.