Jack in the Box Franchise | Cost, Fee, Sale, Opportunity

Franchisees have the option to either franchise a new restaurant or an existing location. jack in the box franchise restaurants provide both drive-thru and seating for 20 to 100 customers. The franchisor may allow for non-traditional formats from time to time.

Jack in the Box Inc. franchises Jack in the Box quick service restaurants. It owned and franchised 2,245 Jack in the Box fast-food restaurants, primarily in the southern and western United States. It was established in 1951 in San Diego, California.

You can find a wide range of food items, including chicken tenders and french fries as well as hamburger and cheeseburger sandwiches. There are also a selection of international themed foods like tacos (Mexico), and egg rolls (China).

Jack in the Box Franchise History

Robert O. Peterson, a pioneer in drive-thru food service, opened a hamburger stand in 1951. Jack in the Box was the first fast-food chain to use the intercom ordering system. This allowed customers to order from the drive-thru.

The chain had expanded to more than 180 locations by 1960, most notably in California and the Southwest. In the 70’s the company was sold to Ralston purina and Jack in the Box started franchising in 1982. The restaurant’s menu changed over the years to include more variety, including curly fries, chicken sandwiches, and salads. In the 2000’s, Jack in the Box expanded to the East and opened its first international location in Guam.

Jack in the Box Franchise Cost

The jack in the box franchise cost (initial investment) to open a Jack In The Box restaurant franchise is between $1.5 million and $3.3 million. This does not include the cost of purchasing real estate.

Initial Franchise Fees

A $50,000 initial franchise fee must be paid by new franchisees to open a Jack in the Box traditional location. This fee is due when the franchise agreement has been signed. For non-traditional Jack in the Box locations, the initial franchise fee is $25,000 per unit.

Franchisees might be required to pay $25,000 for each new location in addition to the initial franchise fee.

Indefinite Royalties and Program Contributions

Franchisees of Jack in the Box must pay a 5% annual royalty fee on gross monthly sales. However, this rate can be increased or decreased in certain situations.

Franchisees are required to pay a quarterly fee for devices and games (e.g. ATMs, slots machines, arcade boxes etc.). These fees must be equal to 40% of net revenues from these devices.

Franchisees are required to pay a marketing fee equal to 5% of their gross sales towards the marketing program of the franchise system.

Tables of Investment:

Name of the FeeLowHigh
Initial Franchise Fee$0$50,000
Analysis of Trade Areas for Free (plus costs)$4,500$7,000
LandOther Products Not Included
Fee for Architect/Engineering Services$49,000$166,000
Environmental Assessment$2,500$34,000
Renovations on-site$286,000$507,000
Building Improvements$611,000$785,000
Furniture, Fixtures, and Equipment$408,000$4699,000
Installation of IT Equipment$45,000$60,000
Computer-Related Services and Licensing$1,000$1,000
Initial Inventory$12,000$20,000
Pre-Opening Training and Inventory Costs$50,000$55,000
Pre-opening additional funds$14,000$17,000
Operating Cash$1,200$3,000
Utility deposits and Business Licenses$500$3,000
Additional Funds (3 Months)$165,300$458,600
TOTAL ESTIMATED COMMITMENT COST PROTOTYPICAL RESTAURANT (excluding land, financing, and certain other costs).$1,651,500$2,638,000
Type of feeThe amount
Royalty (other that Royalty for Games & Devices).5% of gross sales, unless you are eligible for a temporary decrease under the development incentive programme
Royalty for Games and DevicesThese games and devices account for 40% of the net revenue.
Marketing Fee5% of gross sales
RentAs agreed, minimum and percentage rents for a franchisee who rents a location at a franchisor. Additional rent is payable if the franchisor builds the restaurant under the development incentive program.
Franchisor offers cure under leaseAll costs incurred by the franchisor.
Rent default – InterestThe highest rate of interest allowed by law in the state where the premises are located. If there is no maximum rate allowed by law, then the per annum rate is equal to (a) 20% or the prime commercial rate by Bank of America N.T.& S.A. plus 2%.
Common Area Maintenance Fees, Property Taxes, Other AssessmentsVariables, depending on whether the franchisee leases a location from the franchisor (as agreed).
Do not rentThe fixed minimum rent for the final month is 200%. (Payable to the franchisee if they fail to vacate the restaurant at the end the term.
Assignment or sale FeeRestaurants can earn up to $2,500
Software Configuration and Management Project-Related Fees (for Transfers)$125 per hour during regular business hours. However, please see the notes for off-hour rates.
Technical Support Service Fees (RTS call center fees)$137.80 to $178.81 per month
POS Hardware Maintenance FeeVariable.
POS FeeMonthly: $51.60 – $66.96
Back Office Fee$120.37 monthly -$156.20 per month.
Email Collaboration$28.33 to $36.76 per month
Data Services Fee$17.18 to $22.29 per month
Security$16.87 to$21.89 per month
Reporting$47.85 to $62.09 per month
Next Generation Network (NGN).$161 to $230 per restaurant plus construction costs and/or universal fee by the vendor if applicable
Purchase Requisitions-Broker Fee8%
Purchase Requisitions and Incidental FeesVariable.
Purchase Requisitions- Cancelled Order FeeVariable.
Technology Investment FundNo currently
Jack Ca$hRestaurants are charged the current fee.
Program Fee for Stored Value Card ServicesThe monthly service fee will not exceed $34 per month, and shall be determined annually.
Financial AuditAudit cost.
Reassessment of Food SafetyInspection cost.
Supplier /Distributor/Approval and Review FeeVariables based on travel costs, laboratory fees, and inspection costs.
Overdue amounts are subject to a service chargeThe lower of 18%, or the maximum rate allowed by law.
Additional Training and MaterialsVariable.
Collecting CostsAll costs and expenses that the franchisor incurs in order to collect any money owed by the franchisee.
Attorneys’ Fees and CostsAll legal costs, including reasonable accounting fees and attorneys’ fees.
Costs of de-identificationAll costs associated with de-identification of premises.

Jack in the Box Franchise System Size & Composition

Jack in the Box operates over 2,250 locations. More than 85 percent are franchised, and almost all of them are located in the United States. Jack in the Box generates approximately $3.5 billion in annual revenue.

Jack in the Box also owns a subsidiary called Qdoba Restaurant Corporation. This company operates more than 700 Qdoba Mexican Eats restaurants and Qdoba Mexican Grill locations across North America. Around 55% of these units is corporate-run, and approximately 45% are franchised.

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