Jack In The Box Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$990,000 - $4,032,100
Franchise Fee
$10,000
Total US Locations
2,188
Business Summary
Jack in the Box franchises quick-service restaurants that serve a variety of foods, primarily hamburgers, specialty sandwiches, french fries, tacos, salads, bowls, drinks, and side items. These restaurants operate under a uniform system for building design, décor, uniforms, and the preparation and sale of food. Most Jack in the Box restaurants feature drive-thru windows and seating, with some locations being drive-thru only or at non-traditional sites.
Corporate History
Different Rules, LLC, the current franchisor for Jack in the Box, was organized in Delaware on November 13, 2018. It assumed its role on July 8, 2019, after a securitization transaction where Jack in the Box Inc. (JIB) contributed its intellectual property, real estate, and existing U.S. franchise agreements to Different Rules, LLC. Since then, JIB acts as the Manager for Different Rules, LLC, overseeing franchising, marketing, development, real estate, and operational services. The Jack in the Box brand itself has a longer history, with JIB (formerly Foodmaker, Inc.) offering franchises from 1971 until the 2019 securitization. As of September 29, 2024, there are 150 company-owned and 2,040 franchised Jack in the Box restaurants. Different Rules, LLC has not franchised any other type of business. In March 2022, JIB acquired Del Taco Holdings, Inc., and in May 2025, JIB announced it was exploring strategic options, including divestiture, for the Del Taco brand.
Financial Overview
Investment Range
$990,000 - $4,032,100
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$50,000
Royalty %
5%
Marketing %
5%
Equipment Costs (Low)
$1,507,000
Equipment Costs (High)
$3,102,400
Working Capital
$311,950
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The franchisor, Different Rules, LLC, is structured as a special purpose entity (SPV Guarantor, LLC), and its financial statements may not reflect conditions if it operated as an unaffiliated entity. The FDD explicitly states that the franchisor's financial condition "calls into question the Franchisor's financial ability to provide services and support to you." Both the franchisor's parent company, Jack in the Box SPV Guarantor, LLC, and its indirect parent, Jack in the Box Inc., reported a consolidated member's or stockholders' deficit as of September 29, 2024. This indicates that their liabilities exceed their equity. A critical audit matter for Jack in the Box Inc. in 2024 involved a $162.6 million goodwill impairment related to its Del Taco brand, triggered by negative sales trends, lower margins due to wage increases, and unfavorable economic conditions.
Financing Details
Jack in the Box does not regularly offer financing to franchisees. However, it may offer build-to-suit arrangements where the company acquires and constructs a site, then leases it to the franchisee. The rent is negotiated, and franchisees may have an option to eliminate building rent with a future lump-sum payment. Under a Development Incentive Program, franchisees who commit to opening at least three restaurants may be eligible for a $150,000, 0% interest loan for development costs. This loan is repaid by crediting 100% of the royalties from that restaurant until the loan is satisfied, or it becomes fully due if the restaurant is sold or closed. In case of default on this loan, franchisees would owe a 5% penalty on each payment, a 12% default interest rate, and could face accelerated payment obligations, cross-defaults on other agreements, and franchise termination. Jack in the Box also takes a first-priority security interest in the restaurant's business assets, which may be subordinated to other lenders under certain conditions. The company does not charge a fee for helping franchisees find other financial assistance sources.
Performance Metrics
Total US Locations
2,188
Franchised Units
2,038
Corporate Units
150
Avg Square Footage
1,906
Franchising Since
1971
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
10
Litigation Summary
Jack in the Box has a history of legal actions, including both pending and concluded cases. Currently, there are three pending actions: an ongoing 1997 lawsuit in the Philippines against a former franchisee for unlawful operation, which recently saw a decision in favor of Jack in the Box but is subject to appeal; a 2017 case where a Chapter 7 Trustee sued Jack in the Box for alleged mismanagement of a marketing fund and improper termination of agreements, which is awaiting a ruling after an appeal; and a March 2025 complaint from franchisees alleging wrongful termination of franchise agreements and cross-default of other agreements. Previously concluded actions include a 2014 class action regarding gift card redemption policy that settled in 2016, leading to policy changes; a 2018 lawsuit by the National JIB Franchisee Association concerning marketing fund access that settled in 2020 with a new advisory council and audit committee; and several 2020 lawsuits alleging wrongful termination, breach of contract related to a roof repair program, and issues with credit card technology, all of which were resolved through settlements in 2021, some involving significant payments or agreement reinstatements. Additionally, Jack in the Box is subject to two currently effective orders: a 1970 consent decree from the Missouri Attorney General prohibiting certain advertising practices for "hamburgers," and a 2018 stipulation with the San Diego County District Attorney requiring specific gift card redemption policy notices in California and an internal compliance program.
Bankruptcy History
While not directly involving Jack in the Box, the FDD discloses a bankruptcy filing relevant to its management team. Ryan Ostrom, Jack in the Box's Chief Customer and Digital Officer, and Steven Piano, Jack in the Box's Chief People Officer, were employed by GNC Holdings, Inc. when that entity filed for Chapter 11 bankruptcy protection on June 23, 2020. GNC Holdings, Inc.'s reorganization plan was confirmed on October 14, 2020. The FDD clarifies that GNC Holdings, Inc. and its reorganized entities were not and are not related to Jack in the Box or its affiliates.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Jack in the Box does not offer a right of renewal for its franchise agreements. However, the company may, at its sole discretion, decide to grant a new franchise (a "rewrite") to a franchisee upon expiration of their current agreement. This decision is based on factors such as the franchisee's past performance, their representation of the brand, payment history, financial condition, restaurant location and operations, and the overall needs of the system. If a rewrite is offered, it may be for a 20-year term or shorter. Franchisees would need to meet certain conditions, including making building design improvements to meet current brand standards, signing a General Release of all claims against Jack in the Box, entering into a new Franchise Agreement, paying a new franchise fee, and amending other existing Franchise Agreements to align with current provisions. The new agreement could have materially different terms and conditions.
Training & Support Program
Franchisor Assistance
Jack in the Box offers various forms of support to its franchisees. Before opening, the company assists with site approval and provides prototypical building plans, as well as specifications for equipment, signs, fixtures, and initial inventory. They also provide a list of approved suppliers and access to confidential operating manuals. Initial training is provided for the franchise operator and one restaurant manager. After opening, Jack in the Box continues to offer access to basic training materials (at franchisee expense), provides information on new products and procedures, and offers consultation and advice on restaurant operations, merchandising, and local store marketing. Franchisees may also be required to attend additional or refresher training programs. For marketing, Jack in the Box develops and executes comprehensive advertising programs across various media, including digital, social, TV, radio, and out-of-home channels. These efforts also include market research, product development and testing, public relations, and promotions. A Marketing Fund, contributed to by franchisees and the company, supports these activities. Franchisees are required to use a company-specified computer system, which includes hardware, software, high-speed communication equipment, and a point-of-sale (POS) system. Jack in the Box assists with the transition to new POS systems and provides computer support services and technology services for a fee.
Initial Training Hours
560
Training Location
San Diego, California, Dallas, Texas, or Los Angeles, California
Ongoing Support
After a Jack in the Box restaurant opens, the company continues to provide several forms of ongoing support. Franchisees and their employees maintain access to basic training materials, although these materials are at the franchisee's expense. Jack in the Box provides information and training on new products and operational procedures, supplying necessary training materials to help franchisees train their staff. The company also offers consultation and advice as deemed appropriate, covering aspects like restaurant operation, merchandising, and local store marketing, with all local marketing materials requiring company approval. Additionally, Jack in the Box may require the franchisee, their Designated Market Operator, or Certified Franchise Restaurant Managers to attend further or refresher training programs, with the franchisee responsible for associated travel, living, compensation, and any retraining fees.
Franchise Requirements
Ideal Candidate Profile
Jack in the Box seeks franchisees with a strong background in the quick-service restaurant industry. The designated operator for each franchised restaurant must be approved by the company, hold at least a 25% ownership interest in the business, and possess extensive experience in the quick-service restaurant sector. In certain situations, if a franchisee meets the qualifications for an operator and has two years of ownership experience, they may be allowed to appoint a Designated Market Operator who may not hold an ownership interest but must still satisfy the operator criteria. The company also offers incentives for qualified veterans.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
Jack in the Box offers a protected development right within a one-mile radius for single site development agreements. Larger development areas are defined by market points based on various information including competition, store characteristics, consumer surveys, sales history, mobile customer data, demographics, and psychographics.