How often are Jersey Mikes franchisees required to pay the continuing service and royalty fee?
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 typically required to pay a continuing royalty fee on a weekly basis. This fee is 6.5% of the total Gross Receipts from the Jersey Mike's franchised restaurant. Gross Receipts include all sales of food, beverages, merchandise, and services, whether sold at the restaurant or through off-site sales and catering. The fee is paid without any deductions or offsets.
Jersey Mike's collects these royalty fees through an automatic clearing house (ACH) account. Franchisees must set up this account before or when they acquire the real property for their restaurant, granting Jersey Mike's access to receive payments. This ACH system also covers advertising contributions, gift card sales, and any other amounts the franchisee owes to Jersey Mike's.
It's important to note that Jersey Mike's retains the discretion to change the frequency of royalty payments. They can require franchisees to make payments more frequently, such as semi-weekly or even daily, if they choose. Franchisees are also obligated to make available all original books and records for inspection by Jersey Mike's to verify Gross Receipts.