What obligations does a Jersey Mikes franchisee have regarding advertising, as outlined in Item 9, considering the Grand Opening Advertising fee in Item 6?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
in special circumstances.
2 Grand Opening Advertising. You must pay Company a nonrefundable $12,500 ($5,000 if you are purchasing an existing Restaurant or relocating your existing Restaurant with Company approval), all of which will be used to conduct a Grand Opening Advertising program for your Restaurant. The fee is due when you sign a lease for the Restaurant or upon Company approved transfer and must be paid via your automatic clearing house (ACH) a ccount as described above. Company will consult with you about the
program, which is described in Item 11, but Company retains full discretion over expenditures made and the content of the program.
- 3 Real Estate and Construction Fee. You must pay Company $5,000 for Company's assistance with the real estate and construction processes as you develop your Restaurant. The fee is due when you sign a lease for the Restaurant and must be paid via your automatic clearing house (ACH) account as described above. This fee is non-refundable. Company may waive this fee under the Experienced Franchisee Program.
- 4 Corporate Advertising and Development Fund. You must pay 1.0% of your Gross Receipts from your Franchised Restaurant to the JERSEY MIKE'S Corporate Advertising and Development Fund. These payments will be made at the same time and in the same manner as the Continuing Royalty Fees. This advertising fee is uniform to all franchises granted using this Disclosure Document and is non-refundable. Your payment rate may be increased to as much as 6% of your Gross Receipts upon 90 days' notice. However, your total required payments to the Corporate Advertising and Development Fund, the National Media Fund, and the Cooperative Advertising Fund will not exceed 6% of your Gross Receipts. Company may reallocate amounts in the Corporate Advertising and Development Fund to the National Media Fund or the Cooperative Advertising Fund in Company's sole and absolute discretion.
- 5 Cooperative Advertising Fund. You are currently not required to contribute to the Cooperative Advertising Fund, but Company may require you to do so in the future. These contributions, if required, will be made at the same time and in the same manner as the Continuing Royalty Fees. This advertising fee is uniform to all fr anchises granted using this Disclosure Document and is non-refundable. Your contribution rate may be increased to as much as 6% of your Gross Receipts upon 90 days' notice. However, your total r equired contribution to the Corporate Advertising and Development Fund, the National Media Fund, and the Cooperative Advertising Fund will not exceed 6% of your Gross Receipts. Company may reallocate amounts in the Cooperative Advertising Fund to the National Media Fund or the Corporate Advertising and Development Fund in Company's sole and absolute discretion.
- 6 National Media Fund. You must pay 4.0% of the Gross Receipts from your Franchised Restaurant to the National Media Fund. These payments will be made at the same time and in the same manner as the Continuing Royalty Fees. This advertising fee is uniform to all franchises granted using this Disclosure Document and is non-refundable. Your payment rate may be increased to as much as 6% of your Gross Receipts upon 90 days' notice. However, your total required payment to the Corporate Advertising and Development Fund, the National Media Fund, and the Cooperative Advertising Fund will not exceed 6% of your Gross Receipts.
- 7 Audit. Company or its designated agents have the right at all reasonable times to copy and inspect, electronically or otherwise, your books, records and tax returns at Company's expense. If you make sales through any third-party vendors (for example, companies that facilitate online ordering, deliveries or catering orders), Company or its designated agents have the right to access all sales records and other records of such vendor and may request and receive such records directly from the vendor without your consent. Company also may have an independent audit made of your books at Company's expense. If an inspection reveals a discrepancy in the amount of payments made by you to Company, then you must immediately pay Company any amounts owed, as well as in terest on the unreported receipts at the maximum rate permitted by law. Upon discovery of a discrepancy of 2%
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, franchisees have several advertising obligations. A new franchisee must pay a nonrefundable $12,500 to Jersey Mike's for a Grand Opening Advertising program, or $5,000 if purchasing an existing restaurant or relocating. Jersey Mike's consults with the franchisee on this program but retains full discretion over expenditures and content. This fee is due when the franchisee signs a lease for the restaurant. Jersey Mike's will also review and approve or disapprove all promotional materials and advertising to be used by the franchisee.
In addition to the grand opening advertising, franchisees must pay 1.0% of their Gross Receipts to the Corporate Advertising and Development Fund, payable in the same manner and at the same time as the Continuing Royalty Fees. This rate can be increased to as much as 6% with 90 days' notice. Jersey Mike's has the right to direct all advertising programs, including the Corporate Advertising and Development Fund, with sole discretion over creative concepts, materials, and media used. Jersey Mike's is not required to spend advertising funds in proportion to a franchisee's payments or in the franchisee's specific area.
Franchisees are also required to list and advertise continuously in the free classified or Yellow Pages of the local telephone directory under the listing "Restaurants" as "Jersey Mike's Subs" or other listings as deemed appropriate by Jersey Mike's. If multiple Jersey Mike's restaurants are served by the same directory, all classified advertising should list all locations, with each franchisee contributing an equal share to the cost. While franchisees are not currently required to contribute to a Cooperative Advertising Fund, Jersey Mike's may require contributions in the future, up to a maximum of 6% of Gross Receipts when combined with other advertising funds.
Jersey Mike's does not have an advertising council composed of franchisees that advises it on advertising policies, but Jersey Mike's may establish one in the future. Jersey Mike's also retains the right to modify the System, including the adoption and use of new or modified trade names, trademarks, service marks or copyrighted materials, new menu items, new products, new equipment or techniques. This gives Jersey Mike's significant control over the brand's image and marketing strategies, requiring franchisees to adhere to these changes. Prospective franchisees should consider these advertising obligations and the level of control Jersey Mike's maintains over advertising and promotional activities.