Under an Area Development Agreement, what is the development fee for establishing 3 Jersey Mikes franchises?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Development Agreement.
When you sign an Area Development Agreement, you must pay Company a nonrefundable development fee as stated below:
- a. The development fee for 3 JERSEY MIKE'S franchises established under an Area Development Agreement is $50,000, payable to Company when you sign the A rea Development Agreement. No initial franchise fee will be due when you sign individual Franchise Agreements.
- b. The development fee for 5 JERSEY MIKE'S franchises established under an Area Development Agreement is $50,000, payable to Company when you sign the A rea Development Agreement. In addition to the development fee, an initial franchise fee of $6,000 per franchise is due when you sign the franchise agreement for each franchise location.
- c. The development fee for 10 JERSEY MIKE'S franchises established under an Area Development Agreement is $120,000, payable to Company when yo u sign the A rea Development Agreement. No initial franchise fee will be due when you sign individu
Source: Item 5 — INITIAL FEES (FDD pages 14–15)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, the development fee for establishing three Jersey Mike's franchises under an Area Development Agreement is $50,000. This fee is payable to Jersey Mike's when the Area Development Agreement is signed. The FDD specifies that this development fee is nonrefundable.
Notably, the FDD states that no initial franchise fee will be due when signing individual Franchise Agreements under this specific Area Development Agreement for three franchises. This is different from the terms for developing five franchises, where an additional initial franchise fee of $6,000 per franchise is required on top of the development fee.
However, the 2025 FDD also indicates a potential reduced development fee of $25,500 is available if you currently own the majority of at least one other Jersey Mike's franchise and agree to open all three franchised restaurants before December 31, 2026. If all three restaurants are not opened by this date, Jersey Mike's may terminate the Area Development Agreement and any related Franchise Agreements for the unopened restaurants. In this scenario, Jersey Mike's will also waive the real estate and construction fee for each franchised restaurant.