What must a transferee agree to in writing for an involuntary asset transfer to be effective against Jersey Mikes?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
No involuntary Asset Transfer or partitioning of Franchisee's or its Principals' interest in this Agreement, whether in connection with a bankruptcy, foreclosure, divorce or other proceeding, will be eff ective against Franchisor unless (1) a nd until the tra nsferee furnishes Franchisor a signed guaranty under which the transferee agrees to be jointly and severally liable for the payment of Franchisee's monetary obligations under this Agreement, whether or not such obligations are then delinquent, (2) and until the transferee agrees in writing to be personally bound by the confidentiality provisions and restrictive covenants in this Agreement, and (3) the Asset Transfer encompasses Franchisee's and the Principals' total interest in this Agreement, irrevocably designates and appoints Franchisee to be the transferee's agent and attorney-in-fact with whom Franchisor may deal for all purposes expressed in or contemplated by this Agreement.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes' 2025 Franchise Disclosure Document, an involuntary asset transfer will not be effective unless the transferee meets certain conditions. The transferee must furnish Jersey Mike's with a signed guaranty, agreeing to be jointly and severally liable for the payment of the franchisee's monetary obligations under the Franchise Agreement, regardless of whether those obligations are currently delinquent.
Additionally, the transferee must agree in writing to be personally bound by the confidentiality provisions and restrictive covenants outlined in the Franchise Agreement. This ensures that the transferee is legally obligated to maintain the confidentiality of Jersey Mike's proprietary information and adheres to the non-compete restrictions.
Finally, the asset transfer must encompass the franchisee's and the principals' total interest in the agreement. The franchisee must irrevocably designate and appoint the franchisee to be the transferee's agent and attorney-in-fact, allowing Jersey Mike's to deal directly with the franchisee for all purposes related to the agreement. These conditions protect Jersey Mike's interests and ensure the continued stability and integrity of the franchise system during an involuntary transfer.