Do you want to start a restaurant business by buying Jersey Mike’s franchise? If YES, here is how much it cost to open a Jersey Mike’s franchise.

Jersey Mike’s Subs is an American submarine sandwich chain headquartered in 2251 Landmark Pl. Manasquan, NJ 08736, USA. The Jersey Mike’s franchise has almost 1,300 locations open and about 70 more in development across the united states. Five additional locations are open outside the U.S.

The company provides cold subs, hot subs, wraps, kids’ meals, combos, drinks, and desserts. It also offers franchising and catering services.

How Much It Cost to Open a Jersey Mike’s Franchise

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.

  1. 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:

  1. 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.
  2. 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.
  3. 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:

4. 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.

5. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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%.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. Maintenance: cost of maintenance

Due Date:  Time of maintenance.

You must maintain the Premises.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

Summary of the Financial Requirements

Jersey Mike’s Subs has the franchise fee of up to $18,500, with total initial investment range of $178,523 – $746,342.

  • Initial investments: $178,523 – $746,342
  • Net-worth Requirement: $300,000
  • Liquid Cash Requirement: $100,000
  • Ongoing Fees (Initial Franchise Fee): $18,500
  • Ongoing Fee: 6.5%
  • Ad Royalty Fee: 5%

Steps on How to Get Jersey Mike’s Sub Franchise

If you are cool with the requirements and finance involved in acquiring Jersey Mike’s Sub franchise, then you would need to follow these steps;

  • Fill the application at the website for opening a store. You will need to include your name, address, city and state. You will need a phone number and email address. Then choose the amount of capital you will have to invest.
  • Wait for the email that confirms that your application was received and is being reviewed. This email will tell you if you will be approved for the location. It will also go into more specifics regarding the financing. You will be asked to schedule a time for an associate to call you and talk more.
  • Ensure to have your financial papers ready when you have your phone conversation. This is when you will find out if you have enough money to open the store or if you will need financing. If you need help with financing, you can apply for an SBA prequalified loan through the website even before the call if you have no financing.
  • Identify Area of Interest, Review Franchise Disclosure Doc, Complete Initial Interview
  • They will conduct due diligence; 1-6 months, depends on how much the candidate does. Complete In-store Experience within a week
  • Meet with an Executive Team Member within 1-3 weeks
  • Execute franchise agreements and secure real estate; 3-6 months, depending upon real estate availability
  • Note that approval is expected to me quick once you meet the requirements. You should already have a building with all the hookups. After you are approved, the organization will start sending fixtures and merchandise to your building.
  • You will then be mandated to attend a workshop at the headquarters before the opening of your store. You will begin training & construction within 12-14 weeks.
Joy Nwokoro