What portion of the initial Jersey Mikes franchise fee is non-refundable in all circumstances?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
ined solely by Company.
In order to offset Company's expenses related to signing a franchise agreement, $5,000 of the Initial Franchise Fee is non-refundable in all circumstances. The individual franchise fees are fully earned and non-refundable under any circumstances except as provided in a. and b. below:
- a. If no acceptable site is found and approved within five months from the date on which the Franchise Agreement is signed, either Company or you may terminate the Franchise Agreement and Company will refund $13,500 of the initial franchise fee to you upon your signing a termination agreement and general release of claims.
- b. If Company determines that you, your Controlling Principal (as defined in Section 15), designated manager or shift supervisors are unable to satisfactorily complete the training program required of all franchisees, Company may terminate the Franchise Agreement and, unless you have signed an Area Development Agreement, Company will return $13,500 of the initial franchise fee to you upon your signing a termination agreement and ge
Source: Item 5 — INITIAL FEES (FDD pages 14–15)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, $5,000 of the initial franchise fee is non-refundable in all circumstances. This upfront payment is intended to cover Jersey Mikes's expenses related to the signing of the franchise agreement.
This means that regardless of whether a franchisee finds an acceptable site, completes the training program, or any other unforeseen circumstance, Jersey Mikes will retain $5,000 of the initial franchise fee. The FDD does outline some circumstances where the remaining portion of the initial franchise fee may be refundable, specifically if no acceptable site is found within five months or if the franchisee fails to complete the training program. However, the $5,000 is always non-refundable.
Franchise agreements often include non-refundable fees to compensate the franchisor for their initial costs in evaluating and setting up a new franchisee. Prospective Jersey Mikes franchisees should factor this non-refundable portion into their financial planning and understand the conditions under which the remaining fees may be refundable.