Under what circumstances is a waiver by Jersey Mikes of a franchisee default considered binding?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Waiver by Franchisor or any particular default by Franchisee shall not be binding unless in writing and signed by the party sought to be charged and shall not affect or impair Franchisor's right with respect to any subsequent default of the same or of a different nature; nor shall and delay, waiver, forbearance, or omission of Franchisor to exercise any power or rights arising out of any breach or default by Franchisee or any of the terms, provisions, or covenants of this Agreement, affect or impair Franchisor's rights nor shall such constitute a waiver by Franchisor of any right hereunder or of the right to declare any subsequent breach or default. Subsequent acceptance by Franchisor of any payment(s) due to it hereunder shall not be deemed to be a waiver by Franchisor of any preceding breach by Franchisee of any terms, covenants or conditions of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, a waiver by Jersey Mike's of a franchisee's default is only binding if it meets specific requirements. The waiver must be in writing and signed by an authorized party of Jersey Mike's to be considered binding.
This requirement protects Jersey Mike's from unintentional waivers that could arise from informal actions or verbal agreements. It also ensures that any waiver is clearly documented and agreed upon by both parties. This clause also specifies that a waiver of a particular default does not prevent Jersey Mike's from enforcing its rights regarding future defaults, even if they are of the same nature.
Furthermore, the FDD states that accepting payments from the franchisee does not constitute a waiver of any prior breaches of the agreement. This means that even if Jersey Mike's continues to accept royalty payments or other fees after a franchisee has defaulted, Jersey Mike's still retains the right to take action regarding the default. This provision is common in franchise agreements to protect the franchisor's rights and ensure consistent enforcement of the agreement's terms.