Under what condition is a Jersey Mikes developer prohibited from an Asset Transfer?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.2 Conditions to Voluntary Transfer of Rights. Neither Developer nor any Principal (defined in Section 20) shall effectuate an Asset Transfer (defined in Section 20) before the first Franchised Restaurant granted according to this Agreement opens for business. Developer or its Principals only may Transfer its rights under this Development Agreement or in the Developer itself, if it also assigns to the transferee all of its interests under each Franchise Agreement entered into according to this Agreement. Any Asset Transfer shall 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 Developer agrees are reasonable):
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes' 2025 Franchise Disclosure Document, a developer is prohibited from completing an Asset Transfer before the first franchised restaurant, granted according to the Development Agreement, opens for business.
This restriction ensures that Jersey Mikes developers are actively engaged in establishing their initial restaurant before considering transferring their development rights. This condition aims to maintain the integrity of the Jersey Mike's brand by preventing developers from speculating on territories without making an initial investment in opening a location.
After the first Jersey Mikes location is open, any Asset Transfer is subject to the franchisor's prior written consent, which they may grant or deny at their sole discretion. Even after the first location is open, Jersey Mikes retains significant control over who becomes a developer in their system.