Jersey Mike's Subs

The franchise fee of $20,000 is significantly lower than the typical range of $25,000-$37,500 for QSR franchises. What explains this pricing strategy, and are there any additional fees not listed in the standard disclosure document?

Your ad fund rate of 5.0% exceeds the typical QSR range of 2.0-4.0%. How is this fund allocated, and can you provide a breakdown of ad spending by channel for the past 3 years?

The royalty rate of 6.5% is above the typical 5.0-6.0% range. Can you explain the rationale for this rate and whether it has changed in the past 5 years?

The system experienced 12.65% CAGR over 3 years, well above typical growth rates. What percentage of this growth comes from new franchisees versus transfers and acquisitions?

Of the 314 new units added in the past year, how many are owned by existing franchisees (multi-unit operators) versus new franchisees?

You have one pending or recent litigation case. Can you provide details about the nature of this case, the claims involved, and the current status or outcome?

The transfer rate of 2.7% suggests active secondary market activity. What is your policy on broker involvement in unit transfers, and do you have approval rights?

Your non-compete clause restricts franchisees from competing within 10 miles for 2 years post-termination. Has this been enforced, and have there been any legal challenges to this scope?

The disclosure mentions binding arbitration in Monmouth County, New Jersey as the dispute resolution venue. How many disputes have been arbitrated in the past 5 years, and what were the outcomes?

Personal guarantees are required with unlimited scope. Will you clarify whether this extends to all debt obligations or only those directly related to the franchise agreement?

You require purchases from specified vendors for private and proprietary items. Can you provide a list of these required suppliers and detail any rebates or revenue-sharing arrangements with these vendors?

The renewal process requires the franchisee to bring the restaurant into 'full compliance' with current standards. What specific upgrades or renovations are typically required, and what is the average cost franchisees incur?

You offer no renewal fee, which is favorable. However, are there any mandatory technology updates, equipment upgrades, or facility modernization requirements tied to renewal?

The 10-year initial term is standard, but with only 1 renewal option, what happens after 20 years? Can franchisees renegotiate or must they exit?

Item 19 shows median gross sales of $1,285,259 and average of $1,338,874. How many units reported this data, what is the range (low to high), and what was the reporting year?

Can you provide Item 19 data broken down by territory type, store location (urban vs. suburban), or geographic region to assess performance variability?

The system has had zero terminations in the past year despite having 18 non-curable defaults listed. Can you explain what enforcement approach you take with underperforming franchisees?

Five units closed in 2024 and 10 in 2023. Can you specify whether these were voluntary closures, franchisor decisions, or closures due to external factors (lease non-renewal, etc.)?

The disclosure states you do not provide encroachment protection. What happens if you open a company-owned or franchised location near an existing franchisee's territory?

With the system growing at 11.7% annually, how do you ensure adequate support infrastructure for training, operations, and quality control as you scale?