What is a Principal of a Jersey Mikes developer required to do upon the death or permanent disability of a Controlling Principal as described in Section 8.8(a)?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Upon the occurrence of an event described in Section 8.8(a), a Principal of Developer shall notify Franchisor of the event and indicate Developer's intention of continuing to operate Developer's Business consistent with the terms of this Section 8.8(b).
During the first one hundred twenty (120) days after the death or Permanent Disability occurs, Franchisor shall evaluate the interim management's willingness and ability to operate the Developer's Business in compliance with this Agreement.
By the end of the one hundred twenty (120)-day evaluation period, Franchisor shall decide whether the interim management is qualified to manage the Developer's Business and become its Controlling Principal, and shall notify Developer's known Principals of its decision.
As conditions to continuing as a Developer, each Principal shall furnish Franchisor a signed Guaranty and Assumption of Obligations and any deficiency in Developer's compliance with the requirements of this Agreement shall be cured within the time frame prescribed by Franchisor.
Further, Franchisor may require the new Controlling Principal or designated manager to attend and satisfactorily complete the Franchisor's initial training program.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, Section 8.8(a) of the Development Agreement addresses the scenario where a Controlling Principal of a developer dies or becomes permanently disabled, resulting in a change in executive-level responsibility for managing the Developer's Business. In such an event, a Principal of the Developer is required to notify Jersey Mike's of the event and indicate the Developer's intention to continue operating the business, consistent with the terms outlined in Section 8.8(b).
Following the notification, Jersey Mike's will evaluate the interim management's willingness and ability to operate the Developer's Business in compliance with the Development Agreement during the first 120 days after the death or permanent disability. By the end of this 120-day evaluation period, Jersey Mike's will decide whether the interim management is qualified to manage the Developer's Business and potentially become the new Controlling Principal. The franchisor will then notify the Developer's known Principals of its decision.
To continue as a Developer, each Principal must furnish Jersey Mike's with a signed Guaranty and Assumption of Obligations. Additionally, any deficiencies in the Developer's compliance with the requirements of the Development Agreement must be resolved within the timeframe prescribed by Jersey Mike's. Furthermore, Jersey Mike's may require the new Controlling Principal or designated manager to attend and satisfactorily complete the initial training program.