Jersey Mike's Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$203,583 - $1,317,005
Min Cash Required
$15,000
Total US Locations
2,675
Business Summary
Jersey Mike's offers franchises for the establishment, development, and operation of restaurants that specialize in a wide variety of made-to-order submarine-type sandwiches, other sandwiches, and related food products and beverages. These restaurants cater to both on-premises and off-premises consumption.
Corporate History
Jersey Mike's, operating under the legal entity A SUB ABOVE, LLC, was formed in Delaware in October 2019 and began offering franchises in December 2019. The company's origins trace back to 1956 with "Mike's Submarines," an original restaurant concept in Point Pleasant, New Jersey, which was purchased by Peter Cancro in 1975. The predecessor entity, Jersey Mike's Franchise Systems, Inc. (JMFS), had been operating the Jersey Mike's franchise system since February 1987 before a securitization transaction in 2019 transferred franchising operations to A SUB ABOVE, LLC.
Financial Overview
Investment Range
$203,583 - $1,317,005
Franchise Fee (High)
$43,500
Minimum Cash Required
$15,000
Royalty %
6.5%
Marketing %
5%
Equipment Costs (Low)
$147,135
Equipment Costs (High)
$1,031,179
Working Capital
$15,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Jersey Mike's, operating through A Sub Above, LLC, demonstrates good financial health. A Sub Above, LLC, the direct franchisor, shows consistent positive net income and strong equity. Its parent company, Jersey Mike's Franchise Systems, Inc. (JMFS), has significant long-term debt due to securitization transactions, but its auditors have provided an unqualified opinion on its consolidated financial statements, indicating no material misstatements. Additionally, no "going concern" qualifications were noted, and JMFS has consistently met its guarantee obligations for corporate and franchisee leases and other debts.
Financing Details
While Jersey Mike's does not directly offer financing or guarantees for most franchisees, it does provide a special financing program called the Coach Rod Smith Program through its affiliate, Jersey Mike's Franchise Systems, Inc. (JMFS). This program is available to managers of existing Jersey Mike's restaurants who are nominated by senior management. Through this program, JMFS can offer loans covering up to 100% of the restaurant's development costs, though participants may be required to contribute up to 20% themselves. The initial franchise fee and real estate and construction fee may also be included in the financed amount. Loans typically have a five-year repayment term, with fixed annual interest rates ranging from 6% to 10.5% based on qualifications. Repayments begin either 60 days after the restaurant opens or 12 to 24 months after the promissory note date, whichever occurs first. If a landlord provides a tenant improvement allowance or rent abatement, these amounts must be immediately paid to JMFS. JMFS may also require additional payments of up to 50% of the restaurant's earnings before interest, taxes, depreciation, and amortization (EBITDA). The loan requires personal guarantees from the franchisee's principals and their spouses, and JMFS will hold a security interest in the restaurant's assets.
Performance Metrics
Total US Locations
2,675
Franchised Units
2,647
Corporate Units
28
Avg Square Footage
1,500
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
Jersey Mike's (specifically its predecessor, JMFS) had one notable lawsuit. In October 2018, the State of Washington sued JMFS and its Washington franchisees. The lawsuit alleged that a "no-poach" clause in older franchise agreements, which prevented franchisees from hiring each other's employees, violated the Washington Consumer Protection Act. Before the lawsuit was filed, JMFS had already announced it would no longer enforce this clause and had removed it from new agreements. To settle the case, JMFS and the State of Washington reached an agreement in August 2019. JMFS agreed to continue not using or enforcing the no-poach clause and paid the State of Washington $150,000, without admitting any wrongdoing. Jersey Mike's reports no other litigation that needs to be disclosed.
Bankruptcy History
Jersey Mike's does not have any bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew a Jersey Mike's franchise, franchisees must have substantially complied with all terms of their current Franchise Agreement. They must bring their restaurant up to Jersey Mike's current image and operating standards. Franchisees need to give written notice of their intent to renew between 6 to 12 months before their current agreement expires. They must satisfy all financial obligations to Jersey Mike's and its affiliates, meet current training requirements, and sign Jersey Mike's then-current franchise agreement (which may have different terms) and a general release of claims.
Training & Support Program
Franchisor Assistance
Jersey Mike's provides extensive support both before and after a restaurant opens. Before opening, Jersey Mike's helps with site analysis, approves locations and leases, and offers initial training for the franchisee and key staff members (franchisee covers travel/living expenses). It also provides access to the Confidential Operations Manual, lists of approved suppliers, and specifications for products and equipment. During the first month of operation, a Jersey Mike's representative spends at least three days on-site to assist with opening and staff training. Ongoing support includes reviewing and approving marketing materials, managing system-wide advertising funds (Corporate Advertising, National Media, and potential Cooperative Advertising), coordinating telephone listings, and continuously updating approved supplier lists. Jersey Mike's also modifies its system with new products, equipment, and techniques, and provides advice on operations, purchasing, and administrative procedures. Field representatives conduct visits for consultation, guidance, and prepare reports. The franchisor provides and supports a mandatory point-of-sale (POS) system, including upgrades, and sets product pricing guidelines. Franchisees and their employees must comply with ongoing food safety certifications and attend mandatory refresher training programs up to twice a year, each lasting no more than four days, at the franchisee's expense. Additionally, franchisees must ensure their restaurant is always staffed with employees who have completed specific training phases.
Initial Training Hours
397
Training Location
Point Pleasant, NJ, and Certified Training Stores
Ongoing Support
After opening, Jersey Mike's provides ongoing support by sending a representative to the restaurant for at least three days during the first month. They review and approve all marketing and advertising materials, manage the national and corporate advertising funds, and coordinate directory listings. Franchisees receive updated lists of approved suppliers and products, and Jersey Mike's continually updates its system with new menu items, equipment, and operating techniques. The franchisor offers advice and guidance on various operational aspects, including procedures, purchasing, administration, and marketing, and conducts regular site visits with written reports. Jersey Mike's also provides POS system support, including mandatory upgrades, and sets product pricing guidelines. Franchisees and their employees must comply with ongoing food safety certifications and attend mandatory refresher training programs up to twice a year, each lasting no more than four days, at the franchisee's expense. Additionally, franchisees must ensure their restaurant is always staffed with employees who have completed specific training phases.
Franchise Requirements
Ideal Candidate Profile
Jersey Mike's looks for individuals who demonstrate an aptitude for owning or managing a restaurant, which is assessed through a mandatory 16-24 hour unpaid work trial at a designated Jersey Mike's restaurant. Ideal candidates for a single franchise should be prepared to be highly involved, with the franchisee or their approved Controlling Principal (or designated manager) devoting full-time energy and best efforts to the day-to-day management and operation of the restaurant. They must also satisfactorily complete all required training. Managers of existing Jersey Mike's restaurants, nominated by senior management, are considered for the Coach Rod Smith Program, which provides financing for new restaurants.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
For Jersey Mike's, the territory is typically defined as a 0.5 to 1 mile radius around the front door of the franchised restaurant. However, Jersey Mike's can make the area smaller in densely populated urban areas, or for locations with clear market boundaries such as resorts, boardwalks, specific facilities (like stadiums, hospitals, airports, casinos, college campuses, and highway rest stops), or natural geographic features like bodies of water, bridges, or expressways.
Staffing Notes
Jersey Mike's requires that the restaurant always has direct on-premises supervision from either the franchisee's Controlling Principal or an approved full-time manager or shift supervisor who has successfully completed the initial training program. Furthermore, the franchisee must consistently employ at least three individuals who have completed specific phases of the training program: one who has completed Phases 1, 2, and 3; one who has completed Phases 1 and 2; and one who has completed Phase 1. If any of these trained employees leave their position, a replacement must be trained within 120 days. All other employees are also required to complete designated training programs, at the franchisee's expense.