Does Jersey Mikes require approval for a franchisee to transfer their rights in the Area Development Agreement?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| i. Your obligation on termination/non-renewal | Section 18 | Obligations include: stop op erations of the Franchised Restaurant; assign lease to Company at Company's request; stop using the Marks and items bearing the Marks; assign any assumed names to Company; de-identify the Premises from any confusingly similar decoration, design or other imitation of a JERSEY MIKE'S Restaurant; pay all sums owed to Company; pay liquidated damages to Company an amount equal to: (a) the average royalty fees and advertising fe es payable by Franchisee each month over the 12 month period immediately preceding the date of termination (or, if the Restaurant has been open less than 12 months, the average royalty fees and advertising fees payable by Franchisee each month the Restaurant was open); (b) multiplied by the lesser of (i) 36 months, or (ii) the number of months then remaining in the then-current term of the Agreement; stop advertising as a Franchised Restaurant; pay all damages and costs incurred by Company in enforcing the termination provisions of the Franchise Agreement; return or destroy (as Company requires) all manuals and other confidential information; sell to Company, at Company's option, all inventory, equipment, supplies and items bearing the Marks; sell to Company, at Company's option, all assets of the Franchised Restaurant; assign your telephone and facsimile numbers to Company; comply with the covenants not to compete; and cease using any Online Presence and disable, cancel or transfer all such Online Presence to Company. Unless Company and Franchisee agree upon a price, when selling any equipment or assets to Company, "Fair Market Value" will be determined by an accredited appraiser chosen by Company and you. The appraisal costs are shared equally by Company and you. |
| j. Assignment of contract by Company | Section 19.9 | No restriction on Company's right to assign. |
| k. "Transfer" by you definition | Section 31 | Includes transfer of your a ssets, any rights under the f ranchise agreement, or a change of ownership of any interest in an entity which owns the franchise. |
| l. Company's approval of transfer | Section 19.1 | You only may Transfer your rights with Company's prior written approval. Any advertisement for the sale of the Restaurant or the franchise must be approved by Company in writing before it is used. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–64)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, a franchisee needs prior written approval from the company to transfer their rights. Specifically, Item 17 outlines various provisions related to the franchise and area development agreements. One key aspect is the necessity of obtaining Jersey Mike's approval before transferring any rights under the franchise agreement.
This requirement means that if a franchisee wishes to sell their restaurant, transfer ownership, or assign their rights to someone else, they must first seek and receive written consent from Jersey Mikes. This provision allows Jersey Mikes to maintain control over who becomes a franchisee and ensures that any new franchisee meets their standards and qualifications.
Furthermore, any advertisement for the sale of the restaurant or franchise must also be approved by Jersey Mikes in writing before it is used. This stipulation ensures that the advertising materials accurately represent the franchise and comply with Jersey Mike's brand standards. For a prospective franchisee, this underscores the importance of understanding the transfer process and the need to communicate and work closely with Jersey Mikes when considering a transfer of ownership or rights.