For Jersey Mikes, who ultimately approves the permitted items for which the Total Advance can be used?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- All Permitted Items must be approved by Holder, in Holder's sole discretion.
The Total Advance shall equal the amount that Holder distributes in c onnection with these Permitted Items, provided however, if the cost of these Permitted Items exceeds the Approved Total Advance, Maker will be required to use its own funds , as needed, to pay for the Permitted Items and otherwise comply with its obligations to open the Restaurant pursuant to the ter ms of the Franchise Agreement. If Maker defaults on its obligations to open the Restaurant, Maker shall be responsible for its obligation to pay the Total Advance in accordance with the terms of this Note.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, Holder ultimately approves the permitted items for which the Total Advance can be used, in Holder's sole discretion. The document specifies that all permitted items must receive approval from Holder.
The Total Advance is the amount Holder distributes for these permitted items. If the cost of the permitted items exceeds the Approved Total Advance, the franchisee (Maker) is responsible for covering the remaining balance with their own funds to ensure the restaurant opens according to the Franchise Agreement terms.
If the franchisee defaults on their obligation to open the restaurant, they are still responsible for paying back the Total Advance as outlined in the terms of the Promissory Note. This arrangement places the onus on the franchisee to manage costs effectively and ensure they have sufficient capital to cover any overages beyond the Total Advance provided by Holder.