Under what circumstance is an Asset Transfer not allowed for a Jersey Mike's franchise?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.2 Conditions to Voluntary Transfer of Rights. Neither Franchisee nor any Principal (defined in Section 31) shall effectuate an Asset Transfer (defined in Section 31) before the Franchised Restaurant opens for business under any circumstances. After the Franchised Restaurant opens for business, any Asset Transfer will be subject to Franchisor's prior written consent, in its sole and absolute discretion. Franchisor may condition its consent on compliance with certain requirements, including, without limitation, any of the following (which Franchisee agrees are reasonable):
- a. At the time of A sset Transfer, Franchisee is in full compliance with Franchisee's obligations under this Agreement and all other agreements between Franchisee and Franchisor and its Affilia tes, including payment of all monetary obligations due Franchisor and its Affiliates;
- b. The transferee executes Franchisor's then-current form of franchise agreement, Guaranty and Assumption of Obligations, and other collateral agreements Franchisor
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, an Asset Transfer cannot be effectuated before the Franchised Restaurant opens for business. After the restaurant opens, any Asset Transfer is subject to Jersey Mike's prior written consent, which they may grant or deny at their sole discretion.
Jersey Mike's may condition its consent on compliance with certain requirements. These include ensuring the franchisee is in full compliance with all obligations under the Franchise Agreement and other agreements with Jersey Mike's, including payment of all monetary obligations. The transferee must also execute Jersey Mike's then-current form of franchise agreement, Guaranty and Assumption of Obligations, and other collateral agreements. Each principal of the proposed transferee must meet Jersey Mike's criteria for qualifying as a new franchisee.
This policy ensures that Jersey Mike's maintains control over who operates its franchises and protects the brand's integrity. For a prospective franchisee, this means that you cannot sell or transfer the franchise before it is operational. After opening, any transfer requires approval from Jersey Mike's, and they will assess the buyer's qualifications and ensure all financial obligations are met. This is a fairly standard practice in franchising, as franchisors want to ensure that new owners are capable and committed to upholding brand standards.