When you sign the Franchise Agreement, you must pay the Company an Initial Franchise Fee.
The Initial Franchise Fee at Jack in the Box is $50,000 for each franchised restaurant, plus any tax or other fee imposed upon the Company due to the collection of the Initial Franchise Fee. It’s important to note there are some notable exceptions to this rule.
If your franchise term is for less than the standard 20 years, the Initial Franchise Fee is $2,500 for each year or partial year exceeding six months.
If you will be offering a nontraditional location, the Initial Franchise Fee is $25,000 for each unit, plus any taxes and fees imposed on the Company due to collection of the Initial Franchise Fee.
The Initial Franchise Fee is fully earned on the date it is received by the Company and is nonrefundable.
Jack in the Box Franchise Royalties
Like most franchises, you’ll notice Jack in the Box has ongoing royalty fees. Our royalties at Jack in the Box are:
5% Royalty of Gross Sales
5% Marketing Fee of Gross Sales
These royalties ensure you have the best possible resources to run your business and bring customers to your location.
How Much Does a Jack in the Box Franchise Cost?
The estimated initial investment for a Jack in the Box Franchise is $1,697,000 - $2,694,600 excluding land, financing, and certain other costs. We provide a breakdown of this number in our Item 7 found in our Franchise Disclosure Document.
Your initial investment includes virtually everything it takes to start a new restaurant:
One-time initial franchise fee, up to $50k
Building improvements, up to $785k
Initial inventory, up to $20k
Three months of operating funds
These initial investment figures are based on Company-developed restaurant costs to open MK9 and MK10 prototypical buildings in fiscal years 2017 to 2019.
The cost of land will vary widely, depending upon size and location of the property and whether you purchase/own the land or enter into a lease arrangement.
Does Jack in the Box Offer Incentives?
Currently, Jack in the Box only offers incentives for those who agree to open three or more stores. We’ll discuss this incentive below.
Does Jack in the Box Offer Incentives for Multi-Unit Franchises?
Yes, Jack in the Box does offer an incentive for multi-unit franchisees who choose to sign up for three or more stores under our Development Incentive Program.
To help incentivize growth in key markets, Jack in the Box offers qualifying multi-unit investors two different incentive options.
Under the Development Incentive Program for qualified buyers in 2022, if you sign a Development Agreement for a minimum of three (3) restaurants to be developed and opened under the development schedule during the time frames specified in the Development Agreement, and certain other requirements are met, you may be eligible for one the following incentive options, at our sole discretion:
OPTION A: The Royalty (which is currently 5% of Gross Sales) will be reduced to: (i) 1% of Gross Sales for the first year; (ii) 2% of Gross Sales for the second year; (iii) 3% of Gross Sales for the third year; (iv) 4% of Gross Sales for the fourth year; and (v) 5% of Gross Sales for all subsequent years.
OPTION B: If you open the Restaurant on or before the required date in the development schedule, we will loan you $150,000 at 0% interest to be used solely for development costs associated with that restaurant. The loan will be repaid by crediting 100% of the royalty payments for that restaurant otherwise due until the loan is paid in full (i.e., payments will be made by crediting the appropriate portion of royalty payments toward the principal balance outstanding). If the particular restaurant is sold or permanently closed and the loan has not been fully repaid, the remaining principal balance is due in full.
More details about this program can be found in our 2022 Franchise Disclosure Document.
Jack in the Box Financial Requirements
Due to the cost of opening a restaurant with Jack in the Box, we have three minimum financial requirements all our potential franchisees must meet.
Minimum Liquidity: $500,000
Minimum Net Worth: $1.5MM
Franchise Fee: $50k per Location
If you’re unable to meet these requirements, there are many potential sources of liquidity that may be overlooked. For example:
Stocks & Bonds
These are just a few of the options you may like to consider in order to meet our financial requirements.
In addition to the financial requirements above, we also require that potential franchisees have 5+ years in restaurant operation experience.
Does Jack in the Box Offer an Incentive to Veterans?
We currently participate in the International Franchise Association’s Veterans Transition Franchise Initiative (“VetFran”) to provide franchise opportunities to qualifying veterans.
Under the Veterans Program, we reduce the Initial Franchise Fee for the first new Restaurant by 25% or $12,500. Accordingly, the Initial Franchise Fee paid to us is $37,500.
This incentive may not be combined with any other incentive program.
To qualify for the Veterans Program, a prospective franchisee must:
Request the Veterans Program at the time of application.
Meet our then-current qualifications for new franchisees.
Be at least 51% legally and beneficially owned by persons meeting our qualifying veteran status.
Not have previously received a similar incentive from us.
The Company may discontinue or modify this Veterans Program at any time.
Check Out These Additional Resources
We hope this article gave you a better understanding of how much a Jack in the Box Franchise costs.
At Jack in the Box, we work with our franchisees every step of the way in order to get their restaurants up and running.
Here are some additional online resources you may like to check out: