What is the meaning of 'no-poach' provision in the context of the Jersey Mike's franchise agreement?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Court, Oct. 15, 2018). On October 15, 2018, the State of Washington, through its Attorney General, sued JMFS, and each of its franchisees owning restaurants located the State of Washington ("Washington Franchisees"), alleging that JMFS and Washington Franchisees violated the Washington Consumer Protection Act based on the former inclusion in legacy franchise agreements of a so-called 'no-poach' provision prohibiting franchisees from soliciting or hiring JMFS's and other franchisees' current employees. Prior to the complaint's filing, JMFS had publicly announced that it would not enforce the provision in all existing franchise agreements nationwide and had removed the provision from its form franchise agreement. In addition, JMFS amended all of its franchise agreements for re staurants located in Wa shington. To resolve the di spute, JMFS and the State of Washington entered into an Assurance of Discontinuance on August 23, 2019, which required JMFS to continue its franchising practice by not including the 'no-poach' provision in a ny future franchise agreements and to refrain from enforcing the provision in any existing franchise agreements. Further, JMFS
agreed to pay the State of Washington $150,000 without admitting to any fact, liability, misconduct or wrongdoing on JMFS's part.
Source: Item 3 — LITIGATION (FDD pages 13–14)
What This Means (2025 FDD)
According to the 2025 Jersey Mike's Franchise Disclosure Document, a 'no-poach' provision, as it relates to franchise agreements, restricts franchisees from soliciting or hiring employees from Jersey Mike's or other Jersey Mike's franchisees. Item 3 details a past legal action involving Jersey Mike's and its Washington franchisees. The State of Washington sued Jersey Mike's, alleging that the inclusion of a 'no-poach' provision in older franchise agreements violated the Washington Consumer Protection Act.
Prior to the lawsuit, Jersey Mike's had already announced they would not enforce the no-poach provision in existing agreements and had removed it from their standard franchise agreement. To resolve the dispute, Jersey Mike's and the State of Washington entered into an Assurance of Discontinuance on August 23, 2019. This agreement required Jersey Mike's to continue its practice of not including the 'no-poach' provision in future franchise agreements and to refrain from enforcing it in any existing agreements. Jersey Mike's also paid the State of Washington $150,000 without admitting any wrongdoing.
For a prospective Jersey Mike's franchisee, this means that the current franchise agreement should not contain any restrictions preventing them from hiring employees from other Jersey Mike's locations or from Jersey Mike's corporate operations. This provides franchisees with greater flexibility in staffing their restaurants and potentially accessing a wider pool of experienced employees. It also reflects a commitment from Jersey Mike's to comply with legal standards regarding employee mobility and competition.