Under what condition will Jersey Mikes waive the Real Estate and Construction Fee for a franchisee?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
or causes of action which Franchisee or its guarantors may have had under to this Agreement.
- 3.6 Franchisee agrees that promptly af ter obtaining possession of the site for the Franchised Restaurant it will: (i) hire a licensed architect approved by Franchisor, (or if Franchisee chooses to hire an architect not approved by Franchisor, pay Franchisor a fee of Five Thousand Dollars ($5,000.00) to cover Franchisor's costs for oversight of an unapproved architect), to prepare and submit for approval by Franchisor a site survey and any modification to Franchisor's basic architectural plans and specifications (which plans may require modification in order to construct a JERSEY MIKE'S Restaurant), including requirements for dimensions, exterior design, materials, interior design and layout, equipment, fixtures, furniture, signs and decorating, required for the development of a JERSEY MIKE'S Restaurant at the site leased or purc hased therefore, provided that Franchisee may mod ify Franchisor's basic plans and specifications only to the extent required to comply with all applicable ordinances, building codes and permit requirements and with prior notification to and approval by Franchisor; (ii) hire a licensed contractor approved by Franchisor to construct the Franchised Restaurant or, if Franchisee chooses to hire a contractor not approved by Fr anchisor, pay Fr anchisor a f ee of F ive Thousand D ollars ($5,000.00) to cover Franchi
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
Based on the 2025 Jersey Mikes Franchise Disclosure Document, there are no mentions of Jersey Mikes waiving the Real Estate and Construction Fee for a franchisee. However, the document does state that if a franchisee chooses to hire an architect or contractor not approved by Jersey Mike's, they must pay Jersey Mike's a fee of $5,000 to cover oversight or inspections.
This suggests that while the Real Estate and Construction Fee itself isn't waivable, franchisees have some flexibility in choosing their own contractors and architects, albeit with an associated fee for using unapproved professionals. This could be relevant for franchisees who have existing relationships with contractors or architects, or who believe they can find more cost-effective options independently.
Prospective franchisees should clarify with Jersey Mikes the exact nature of the Real Estate and Construction Fee, whether it can be reduced or waived under any circumstances, and the specific services or benefits it covers. Understanding the components of this fee and the potential cost savings from using independent contractors (even with the oversight fee) is crucial for making an informed investment decision.