Under what circumstances can Jersey Mikes terminate the franchise agreement if another agreement between the franchisee (or its affiliates) and the franchisor (or its affiliates) is terminated?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.3 Developer shall be deemed in default under this Agreement, if Developer (i) fails to enter into Franchise Agreements with Franchisor as required by this Agreement for the Franchised Restaurants and/or to open Restaurants within the periods described on the Development Schedule; (ii) fails to comply with any other term and condition of this Agreement; (iii) makes or attempts to make a Transfer in violation of this Agreement; or (iv) if Developer fails to comply with the terms and conditions of any individual Franchise Agreement with Franchisor, or of any other agreement to which Developer or its Affiliates and Franchisor or its Affiliates are parties. Upon any such default, Franchisor, in its discretion, may do any one or more of the following:
- (a) Terminate this Agreement and all rights granted to Developer hereunder without affording Developer any opportunity to cure the default, effective immediately upon receipt by Developer of written notice from Franchisor;
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, a developer can be deemed in default of their Development Agreement if they fail to comply with the terms and conditions of any individual Franchise Agreement with Jersey Mike's, or any other agreement to which the Developer or its Affiliates and Jersey Mike's or its Affiliates are parties. Upon such a default, Jersey Mike's has the discretion to terminate the Development Agreement and all rights granted to the developer immediately upon written notice, without any opportunity to cure the default.
This means that if a Jersey Mike's developer or their affiliates violate the terms of any agreement they have with Jersey Mike's or its affiliates, Jersey Mike's can terminate the Development Agreement immediately. This could include failing to meet the obligations outlined in a Franchise Agreement for a specific restaurant or breaching the terms of a supply agreement.
This provision highlights the importance of adhering to all agreements with Jersey Mike's. A prospective developer should carefully review all agreements and understand the potential consequences of non-compliance, as any breach could lead to the termination of the Development Agreement and the loss of rights to develop Jersey Mike's restaurants.