What right does Jersey Mikes have if the franchisee fails to comply with modification requirements after termination?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
greements comply with and are enforceable under applicable laws.
9. MODIFICATION OF THE SYSTEM
Franchisor reserves the right to change or modify the System in its sole and absolute discretion by adopting and using new or modified System Standards, trade names, trademarks, service marks, copyrighted materials, or specifications or standards for menu items, products, services, building design, equipment or new techniques and Franchisee shall accept, adopt and make any such mandatory changes at the Restaurant, as if they were part of this Agreement at the time of its execution. Franchisee will make such expenditures as such changes or modifications in the System as Franchisor may reasonably require, utilizing a Franchisor-approved licensed contractor, provided the cost of capital improvements, new equipment and remodeling does not exceed One Hundred Fifty Thousand Dollars ($150,000.00) during the term of this Agreement, and the cost of updates and upgrades of Franchisee's point-of-sale system ("POS System") does not exceed Fifty Thousand Dollars ($50,000) during the term of this Agreement. Franchisee shall not change, modify or alter the System in any way.
10.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Jersey Mikes retains certain rights even after the termination of the franchise agreement, particularly concerning modifications to the system. Jersey Mikes has the right to change or modify the system in its sole and absolute discretion by adopting and using new or modified System Standards, trade names, trademarks, service marks, copyrighted materials, or specifications or standards for menu items, products, services, building design, equipment or new techniques. The franchisee is obligated to accept, adopt, and implement these mandatory changes at their restaurant as if they were part of the original agreement.
Franchisees are expected to make expenditures for these changes or modifications as reasonably required by Jersey Mikes, utilizing a franchisor-approved licensed contractor. However, the cost of capital improvements, new equipment, and remodeling is capped at $150,000 during the term of the agreement, and updates and upgrades to the point-of-sale system are capped at $50,000 during the agreement's term. The franchisee is explicitly prohibited from independently changing, modifying, or altering the system in any way.
If it becomes advisable for Jersey Mikes and/or the franchisee to modify or discontinue the use of any mark, or to use additional or substitute trade names, trademarks, service marks, or other commercial symbols, the franchisee must comply with Jersey Mikes's directions within a reasonable time after receiving notice. Jersey Mikes bears no liability or obligation regarding the franchisee's modification or discontinuation of any mark. This ensures Jersey Mikes can maintain brand consistency and adapt to market changes, while franchisees are bound to adhere to these changes, with financial limits on certain capital expenditures.