Franchise: Jack in the Box
Franchising Since: 1982
Headquarters: San Diego, Calif.
Number of Units: 2,251
About the Franchise
Jack in the Box is among the nation’s leading fast-food hamburger franchises, with more than 2,250 quick-serve restaurants in over 21 states.
Jack in the Box offers such standard fast-food fare as burgers, fries and soft drinks, as well as salads, tacos and breakfast items. The company’s emphasis on operational efficiency and franchisee-focused value innovation has led it to become one of the most respected and sought after brands in the industry.
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Over the years, Jack in the Box has developed strong operating systems that franchisees can take advantage of today, including: a single POS and back-office IT system, in-restaurant computer-based training systems and a state-of-the-art Innovation Center that acts as the hub of all research and development, marketing and food safety initiatives.
Financial Assistance
The franchisor does not regularly offer financing in connection with the establishment or operation of new franchised restaurants. In some circumstances, however, the franchisor may offer short-term bridge financing of up to 80% of the purchase price of the restaurant if the franchisee is not able to secure the financing from other sources at the time of the closing of the transaction.
Term of Agreement and Renewal
The length of the initial franchise term is negotiated, and there are no rights of renewal.
Breakdown of Costs
The following information is compiled from the Franchise Disclosure Document of Jack in the Box (2015). The FDD will provide you with in-depth information regarding the costs and expenses you can plan to incur when developing a Jack in the Box franchise.
Development Fee (if applicable): $25,000
Initial Franchise Fee: $0 to $50,000
The Initial Franchise Fee is typically $50,000 for each franchised Restaurant, plus any tax or other fee imposed upon the Company due to the collection of the franchise fee. 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 6 months. The Company may reduce the Initial Franchise Fee or accept installment payments.
Fee for Trade Area Survey Analysis: $0 to $7,000 (plus expenses)
Land: Not included
The cost of land will vary widely, depending upon size and location of the property and whether you purchase or own the land or enter into a lease arrangement therefore. Typical physical site criteria would include 20,000 to 30,000 square feet, 150 feet of frontage, 2,032 to 2,561 square feet for building, and parking to accommodate 20 to 30 spaces.
Fee for Architect/Engineering Services: $40,000 to $165,000
Environment Assessment: $3,000 to $23,000
A “Phase One” assessment costs approximately $2,500 to $3,500. The cost of a “Phase Two” assessment varies considerably, ranging from $10,000 to $20,000. The cost of a “Phase Three” assessment ranges from $30,000, up.
On-Site Improvements (excluding landscaping): $206,000 to $472,000
Site improvements include excavation, grading, utility work, and outdoor lighting, among other things. Offsite development costs, if any, are excluded. Please note that approximately $25,000 to $40,000 of these site improvement costs are fees that apply only to the development of Company-Initiated Sites.
Construction: $418,000 to $622,000
The Company compiled these estimates based on its experience building its prototypical building where there were no unusual conditions such as special signage needs or city-required exterior finishes. The estimate does not include costs of building permits; onsite or offsite site improvements such as lighting, land excavation or fill, utility work, and paving; landscaping; or complying with the requirements of any governmental authority.
Furniture, Fixtures and Equipment: $340,000 to $441,000
Depends upon kitchen configuration and dining room size. Excludes security equipment.
IT Equipment and Installation: $35,000 to $45,000
Includes purchase and installation of Back-Office PC, Web-based training device, CBT terminal, point-of-sale system, kitchen display equipment, and order confirmation system.
Computer-Related Services and Licensing: $4,100
Initial Inventory: $12,000 to $20,000
Pre-Opening Training and Inventory Expenses: $50,000 to $55,000
The pre-opening training and inventory expenses in a new market can be significantly higher.
Pre-Opening Additional Funds: $13,000
Uniforms: $1,500 to $3,000
Business Licenses and Utility Deposits: $2,000 to $8,000
Business licenses and utility deposit costs vary greatly by municipality and state.
Additional Funds (3 months): $165,300 to $458,600
“Additional Funds” include the following for the first 3 months of operations: initial employee wages; management compensation; ongoing purchases of inventory of food and supplies; utilities; repairs and maintenance; and insurance (annual premium)
TOTAL ESTIMATED COST FOR PROTOTYPICAL MARK 9-STYLE RESTAURANT (EXCLUDING LAND, FINANCING AND CERTAIN OTHER COSTS): $1,316,100 TO $2,414,7000
Financing rates, lease rates, cash injection, loan or lease fees, creditworthiness, lender selection and interest rates, closing costs and factors may vary greatly, and will significantly affect your initial investment.
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