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Considering a Jersey Mike’s Subs Franchise? Don’t Overlook These 25 Important Franchise Fees

by Franchise Chatter on November 11, 2016

in Franchise Fees, Sandwich Franchise



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Don't Invest in a Franchise Until You Check Out This List

Jersey Mike's Subs Photo by wuperruper

If you are considering a Jersey Mike’s Subs franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Jersey Mike’s Subs’ 2016 FDD).

1.  Initial Franchise Fee:  $18,500

  • Unless you sign a Development Agreement, when you sign a Franchise Agreement, you must pay Jersey Mike’s Subs an initial franchise fee of $18,500 for a standard Franchise Agreement.

2.  Area Development Agreement:  $50,000 to $120,000

  • When you sign an Area Development Agreement, you must pay Jersey Mike’s Subs a non-refundable development fee as stated below:
  • a.  The development fee for 3 Jersey Mike’s Subs franchises established under an Area Development Agreement is $50,000, payable to Jersey Mike’s Subs when you sign the Area Development Agreement. No initial franchise fee will be due when you sign individual Franchise Agreements.
  • b.  The development fee for 5 Jersey Mike’s Subs franchises established under an Area Development Agreement is $50,000, payable to Jersey Mike’s Subs when you sign the Area Development Agreement. In addition to the development fee, an initial franchise fee of $6,000 per franchise is due when you sign the Franchise Agreement for each franchise location.
  • c.  The development fee for 10 Jersey Mike’s Subs franchises established under an Area Development Agreement is $120,000, payable to Jersey Mike’s Subs when you sign the Area Development Agreement. No initial franchise fee will be due when you sign individual Franchise Agreements.
  • All fees paid as required by an Area Development Agreement are fully earned by Jersey Mike’s Subs at the time of signing and are non-refundable, even if you, or your designated manager, fail to satisfactorily complete training or find approved locations.
  • Jersey Mike’s Subs may elect to permit a franchisee to use a portion of the fees for marketing assistance, in certain situations as determined solely by it.
  • As a condition of awarding you a franchise, at Jersey Mike’s Subs’ sole discretion, you must work in a Restaurant it designates, without compensation, for approximately 16-24 hours so that it may evaluate your aptitude for owning or managing a Restaurant. It has no duty to award you a franchise.
  • In order to offset Jersey Mike’s Subs expenses related to signing a Franchise Agreement, $5,000 of the initial franchise fee is non-refundable in all circumstances. The individual franchise fees are fully earned and non-refundable under any circumstances except as provided below:
  • a.  If no acceptable site is found and approved within nine months from the date on which the Franchise Agreement is signed, either Jersey Mike’s Subs or you may terminate the Franchise Agreement and it will refund $13,500 of the initial franchise fee to you upon your signing a termination agreement and general release.
  • b.  If Jersey Mike’s Subs determines that you, your Controlling Principal, designated manager, or shift supervisors are unable to satisfactorily complete the training program required of all franchisees, it may terminate the Franchise Agreement and, unless you have signed an Area Development Agreement, it will return $13,500 of the initial franchise fee to you upon your signing a termination agreement and general release of claims.
  • Certain non-traditional franchisees operating in locations such as airports, university campuses, casinos, or stadiums have paid reduced franchise fees and pay reduced royalty rates. Other than the foregoing, all initial franchise fees and royalty fees are uniform and charged to all franchisees.

3.  Continuing Services and Royalty Fees:  6.5% of Gross Receipts for a standard Franchise Agreement



  • Due Date:  Payable weekly on Monday via wire transfer.
  • “Gross Receipts” includes the total of all sales of food products, beverages, and other merchandise and products to your customers, whether or not sold or performed at or from the Jersey Mike’s Subs Franchised Restaurant (including off site sales and catering sales), regardless of whether the sales were made in compliance with the Franchise Agreement, less sales, use, or service taxes collected and paid to the appropriate taxing authority, and customer refunds, discounts, and coupons.
  • Frequency of payment is subject to change.

4.  Grand Opening Advertising:  $12,500; $5,000 for transfers or relocations

  • Due Date:  Due when you sign lease; upon Jersey Mike’s Subs approved transfer.
  • When you sign a lease for your Restaurant, you must pay Jersey Mike’s Subs $12,500 which will be used by it to conduct a Grand Opening Advertising program for your Restaurant.
  • To be spent during the first month of operation.

5.  Corporate Advertising and Development Fund:  currently 1.0% of Gross Receipts

  • Due Date:  Payable at the same time and in the same manner as Continuing Services and Royalty Fees.
  • Jersey Mike’s Subs may require you to pay up to 6% of your Gross Receipts to this Fund. However, your total payments to the Corporate Advertising and Development Fund, the National Media Fund, and the Cooperative Advertising Fund will not exceed 6% of Gross Receipts.
  • Amounts in the Corporate Advertising and Development Fund may be reallocated to the National Media Fund or the Cooperative Advertising Fund in Jersey Mike’s Subs’ sole and absolute discretion.

6.  Cooperative Advertising:  currently not required

  • Due Date:  Payable at the same time and in the same manner as Continuing Services and Royalty Fees.
  • Your total contributions to the Corporate Advertising Fund, National Media Fund, and the Cooperative Advertising Fund will not exceed 6% of Gross Receipts.
  • Amounts in the Cooperative Advertising Fund may be reallocated to the National Media Fund or the Corporate Advertising and Development Fund in Jersey Mike’s Subs’ sole and absolute discretion.

7.  National Media Fund:  currently 0.5% of Gross Receipts

  • Due Date:  Payable at the same time and in the same manner as Continuing Services and Royalty Fees.
  • Your total payments to the Corporate Advertising Fund, National Media Fund, and the Cooperative Advertising Fund will not exceed 6% of Gross Receipts.
  • Amounts in the National Media Fund may be reallocated to the Corporate Advertising and Development Fund or the Cooperative Advertising Fund in Jersey Mike’s Subs’ sole and absolute discretion.

8.  Audit:  cost of audit, plus interest on underpayment

  • Due Date:  30 days after billing.
  • Payable only if audit of Jersey Mike’s Subs shows that you understated Gross Receipts by at least 2%.

9.  Operation of the Franchised Restaurant in Case of Your Default:  $75 per hour, plus expenses

  • Due Date:  Weekly after time of service and at the same time as Continuing Services and Royalty Fees.
  • Jersey Mike’s Subs may operate your Franchised Restaurant if you fail to cure a default within 20 business days of receipt of written notice to cure.

10.  Late Fees:  highest applicable lawful rate for open account business credit, not to exceed 1.5% per month; 5% charge on late Continuing Services and Royalty Fee, and other amounts owed equal to higher of 5% of amount due or $25

  • Due Date:  After due date.
  • Applies to all Continuing Services and Royalty Fees, payments for Corporate Advertising Fund, National Media Fund, and contributions to Cooperative Advertising Fund, and amounts due for purchases from Jersey Mike’s Subs or affiliate.

11.  Supplier/Supplies Approval:  reasonable cost of inspection and actual cost of test

  • Due Date:  Time of inspection.
  • Applies to new suppliers or supplies you wish to purchase that Jersey Mike’s Subs has not approved.

12.  General Contractor and Architect Approval:  $5,000 each

  • Due Date:  Upon commencement of construction build-out, or relocation or retrofit of your existing Restaurant.
  • Applies to general contractors and architects you wish to utilize for store construction that Jersey Mike’s Subs has not approved. Fee may be waived in Jersey Mike’s Subs’ sole and absolute discretion.

13.  Operation of the Franchised Restaurant in Case of Your Absence, Incapacity, or Death:  $75 per hour, plus expenses. Rate is subject to change.



  • Due Date:  Weekly after time of service and at the same time as Continuing Services and Royalty Fees.
  • Prevents harmful interruption/depreciation of the Franchised Restaurant in case of your absence, incapacity, or death.

14.  Monthly Software License Fee and Support Package for Point-of-Sale System, including all currently provided Software Programs, Licensing Fees, and Support Services (“Help Desk”):  $195/month

  • Due Date:  Due 1st day of every month via wire transfer.
  • Fee may be collected by Jersey Mike’s Subs via ACH or you may be required to pay this fee through its designated vendor. Fee subject to change.

15.  Secure Network Fee for Processing of Credit Cards and Transferring of Sales:  $32/month

  • Due Date:  Due 1st day of every month via wire transfer.
  • Fee may be collected by Jersey Mike’s Subs via ACH, the majority of which is paid to designated vendor, or you may be required to pay this fee through the designated vendor. Fee subject to change.

16.  Gift Card Program:  $9.50/month, plus $0.50 per week fee for any week in which you have activity in this Program

  • Due Date:  Due 1st day of every month via wire transfer.
  • Fee is collected by Jersey Mike’s Subs via ACH and paid to designated vendor. Fee subject to change.

17.  Transfer Fee:  $5,000 to transfer the Franchise Agreement

  • Due Date:  At time of transfer.
  • This transfer fee does not apply to an assignment of interest to a corporation under Section 19.6 of the Franchise Agreement.

18.  Additional Assistance:  $75 per hour, plus expenses. Rate is subject to change.

  • Due Date:  Time of assistance.
  • Jersey Mike’s Subs provides 3 days of assistance during the first month of operation at its cost. Additional training is at your cost.

19.  Continuing Education:  you must pay your expenses as well as your employees’ expenses in attending these programs

  • Due Date:  Time of program.
  • Attendance will not be required more than twice a year and will not last more than 4 business days.

20.  Maintenance:  cost of maintenance

  • Due Date:  Time of maintenance.
  • You must maintain the Premises.

21.  Cost of Enforcement or Defense:  all costs including attorneys’ fees; the Jersey Mike’s Subs’ in-house counsel fee shall be charged at a rate of $300 per hour

  • Due Date:  On settlement or conclusion of claim or action.
  • You will reimburse Jersey Mike’s Subs for all costs in enforcing its obligations or defending any claim under the Franchise Agreement if it prevails.

22.  Relocation Fee:  $5,000.

  • Due Date:  At time of relocation.
  • Jersey Mike’s Subs may charge you a fee if you relocate your Franchised Restaurant.

23.  Indemnification:  all costs including attorneys’ fees

  • Due Date:  On settlement or conclusion of claim or action.
  • You will defend suits at your own cost and hold Jersey Mike’s Subs harmless when they involve damages from the operation of your business.

24.  Liquidated Damages:  Average Monthly Royalty and Advertising Fees for the 12-month period before termination, multiplied by the lesser of 36 or the number of months remaining in Franchise Agreement

  • Due Date:  Upon Jersey Mike’s Subs’ termination of Franchise Agreement based on franchisee default.
  • Payable for any damages for Jersey Mike’s Subs’ lost future revenue as a result of your default; but this is in addition to any other damages, costs, and expenses to which it may be entitled.

25.  Miscellaneous:  varies

  • Due Date:  On breach of Franchise Agreement.
  • You must personally guaranty and comply with all terms of and will be liable for any breach of the Franchise Agreement.


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