Risk Score
Pending analysis
Investment Range
$1,719,655.82 - $2,529,255.82
Franchise Fee
$17,500
Min Cash Required
$20,000
Total US Locations
236
Business Summary
Jason's Deli operates restaurants that are a modified New York-style delicatessen. These restaurants offer a wide variety of deli products, including sandwiches, soups, baked potatoes, pasta dishes, wraps, and a salad bar. Jason's Deli also provides catering and delivery services to its customers.
Corporate History
Deli Management, Inc. was incorporated in Texas on October 3, 1983. However, the first Jason's Deli restaurant was opened earlier, on November 30, 1976, in Beaumont, Texas, under the Jason's Deli Corporation. In 1983, Deli Management, Inc. acquired the trademark rights and other assets associated with the franchise and licensed Jason's Deli Corporation to use the mark. In January 1989, Deli Management, Inc. acquired the operating assets of business entities licensed to operate five Jason's Delis, including Jason's Deli Corporation, and began operating these as company-owned locations. Deli Management, Inc. has not offered franchises in any other line of business and also operates an inventory and small wares distribution division called Jason's Deli Distribution.
Financial Overview
Investment Range
$1,719,655.82 - $2,529,255.82
Franchise Fee (Low)
$17,500
Franchise Fee (High)
$35,000
Minimum Cash Required
$20,000
Royalty %
4%
Equipment Costs (Low)
$1,410,000
Equipment Costs (High)
$2,060,000
Working Capital
$27,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Jason's Deli's financial condition raises questions about its ability to provide services and support to franchisees, as explicitly stated in the FDD's Special Risks section. The company has a negative equity, reporting a total deficit of $13,529,209 as of December 31, 2024, and $24,359,212 as of December 31, 2023. This financial deficit is also highlighted in relation to the company's revenue from the sale of food and supplies.
Financing Details
Jason's Deli does not offer any direct or indirect financing to its franchisees. Franchisees are responsible for securing their own loans, leases, or other financial obligations and cannot rely on the franchisor to guarantee their debts.
Performance Metrics
Total US Locations
236
Franchised Units
73
Corporate Units
163
Avg Square Footage
4,750
Franchising Since
1983
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
3
Litigation Summary
Jason's Deli has three active litigation cases. The first case, filed in Dallas County, Texas in 2024, involves an employee alleging disability discrimination, which Jason's Deli denies, stating the employee voluntarily resigned. This case is currently in the discovery phase. The second case, filed in the U.S. District Court for Nebraska in 2023, concerns allegations of pregnancy discrimination and retaliation for discussing wages. Jason's Deli claims it provided accommodations and that the termination was for legitimate, non-discriminatory reasons. This case is currently on appeal after the trial court ruled in favor of Jason's Deli. The third case, filed in Harris County, Texas in 2021, alleges sex discrimination, which Jason's Deli denies, asserting a legitimate, non-discriminatory reason for termination. This case is scheduled for trial in mid-2025.
Bankruptcy History
Jason's Deli reports that it has no bankruptcy history to disclose. Neither Jason's Deli nor its executives have been involved in any bankruptcy proceedings that require disclosure in this document.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their Jason's Deli franchise, franchisees must notify the franchisor between 90 and 180 days before the current term ends. They must be in good standing, having substantially complied with all terms of their current Franchise Agreement and other agreements, and satisfy all monetary obligations. Franchisees must also provide satisfactory evidence that they can stay in possession of their approved location or secure a new one. They are required to renovate and modernize the deli premises to meet Jason's Deli's current standards and image, comply with the franchisor's current qualification and training requirements for themselves and their employees, and sign a general release of claims. Finally, they will execute Jason's Deli's then-current renewal Franchise Agreement, which may have different terms, and pay a renewal fee of $5,000.00.
Training & Support Program
Franchisor Assistance
Jason's Deli provides various types of assistance to franchisees. Before opening, the franchisor offers standard construction plans and layouts, guidance in site selection, review and approval of site and construction plans, and initial training for the franchisee and four management personnel. They also provide assistance during the deli's opening and access to an Operations Manual and other training aids. After opening, Jason's Deli provides ongoing merchandising, marketing, and other data and advice, periodic individual or group consultation via visits, phone, newsletters, or bulletins, and regular publications on plans, policies, and developments. The franchisor also offers additional resources and assistance as they develop.
Initial Training Hours
626
Training Location
Closest geographic corporate training location to the deli to be opened, determined by Jason's Deli's Development Department
Ongoing Support
After a Jason's Deli location opens, the franchisor provides ongoing merchandising, marketing, and other data and advice as it develops these resources. Franchisees receive periodic individual or group advice, consultation, and assistance, which can be delivered through personal visits, telephone calls, newsletters, or bulletins. Jason's Deli also publishes and provides bulletins, brochures, manuals, and reports detailing its plans, policies, research, developments, activities, and changes to operational standards. The franchisor offers other resources and assistance as they are developed and made available to all franchisees.
Franchise Requirements
Ideal Candidate Profile
Jason's Deli seeks franchisees who possess strong personal drive, a commitment to continuous effort, and a keen eye for supervision and attention to detail. Ideal candidates, or their general managers and three other key management personnel, should have five or more years of full-service restaurant management experience to effectively perform at a general manager level after completing the training program. The franchisor specifically requires at least three, and sometimes all five, initial training attendees to have this extensive prior management experience.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
5
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
non-exclusive
Territory Size Requirements
For a single Jason's Deli franchise, the location must be within a 'General Area' specified in a Site Development Addendum, which is typically a city, county, or other political subdivision, solely to define the search area. For an Area Development Agreement, the 'option area' is determined jointly by the franchisor and franchisee, based on the market's capacity for stores. This option area is described in an attachment and consists of a metropolitan area, county, or other political subdivision.
Staffing Notes
Jason's Deli requires the franchisee, a general manager, and three other management persons to personally manage the deli. These five individuals must successfully complete the franchisor's initial training program. Additionally, trainees for the general manager role should ideally have five or more years of full-service restaurant management experience, with at least three, and sometimes all five, initial attendees being required to have this level of experience. The franchisor emphasizes that the success of a Jason's Deli depends on the franchisee's personal and continuous efforts, supervision, and attention.