Under what circumstances is it unlawful for Jersey Mikes to repurchase a franchisee's business during the term of the franchise agreement?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Provisions in franch ise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.
Source: Item 23 — RECEIPTS (FDD pages 77–421)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, provisions that allow Jersey Mikes to repurchase a franchisee's business during the franchise term without the franchisee's consent are unlawful. However, there is an exception to this rule.
The FDD states that Jersey Mikes is allowed to repurchase a franchise if the franchise agreement is terminated for good cause. This means that if Jersey Mikes has a legitimate reason to terminate the agreement, such as the franchisee's failure to comply with the terms of the agreement, they can repurchase the business.
This provision is based on the state law RCW 19.100.180(2)(j). Prospective franchisees should understand the conditions under which Jersey Mikes can repurchase their business, as this could have significant financial implications. It is important to carefully review the franchise agreement and understand what constitutes "good cause" for termination.