How often is the Continuing Royalty Fee paid by a Jersey Mikes franchisee?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.1 In consideration of Franchisor's grant to Franchisee of a license to use the Marks and System, Franchisee shall pay without offset, credit or deduction of any nature, to Franchisor, so long as this Agreement shall be in effect, a Continuing Royalty Fee equal to six and one-half percent (6.5%) of the total Gross Receipts derived from the JERSEY MIKE'S Franchised Restaurant. Said fee shall be paid weekly in the manner specified below or as otherwise prescribed in the Manual. Notwithstanding the foregoing, Franchisor in its sole discretion may change the frequency of such payments (including but not limited to requiring semi-weekly or daily payments).
- a. Franchisee will make available for reasonable inspection at reasonable times by Franchisor, all original books and records that Franchisor may deem necessary to ascertain Franchisee's Gross Receipts.
- b. The term "Gross Receipts," as used in this Agreement shall mean and include the total of all sales of food products, beverages, other merchandise and products, and services to customers of Franchisee, whether or not sold or performed at or from the JERSEY MIKE'S Franchised Restaurant (including without limitation all off site sales and catering sales), and regardless of whether the sales were made in compliance with this Agreement, less sales, use or service taxes collected and paid to the appropriate taxing authority, and customer refunds, discounts, and coupons.
- All Continuing Royalty Fees, advertising contributions, gift card sales, amounts due for purchases by Franchisee from Franchisor and other amounts which Franchisee owes to Franchisor shall be paid through an automatic clearing house (ACH) account as further described in the Manual. Prior to or at the same time Franchisee acquires an interest in the real property on which Franchisee shall operate its Franchised Restaurant, Franchisee shall set up an ACH account and Franchisor shall have access to such account for the purpose of receiving payment for Continuing Royalty Fees, advertising contributions, gift card
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, franchisees are generally required to pay a Continuing Royalty Fee on a weekly basis. This fee is calculated as 6.5% of the total Gross Receipts from the Jersey Mike's restaurant. Gross Receipts include all sales of food, beverages, merchandise, and services, whether sold at the restaurant or off-site, less sales taxes, customer refunds, discounts, and coupons.
Jersey Mike's requires that all Continuing Royalty Fees, advertising contributions, gift card sales, and other amounts owed to Jersey Mike's be paid through an automatic clearing house (ACH) account. Franchisees must set up this ACH account before or when they acquire an interest in the real property where they will operate the restaurant, granting Jersey Mike's access to the account for payment collection.
It's important to note that while the standard payment frequency is weekly, Jersey Mike's retains the discretion to change the frequency of these payments. This could include requiring semi-weekly or even daily payments, depending on their assessment. Franchisees are expected to maintain accurate books and records, which Jersey Mike's has the right to inspect to verify Gross Receipts.