Franchise Costs: Detailed Estimates of Jack in the Box Franchise Costs (2018 FDD)

Updated May 14, 2018.

Detailed Estimates of Jack in the Box Franchise Costs Based on Item 7 (Estimated Initial Investment) of Jack in the Box’s 2018 Franchise Disclosure Document

• These initial investment figures are based on Company-developed restaurant costs to open MK9 and MK10 prototypical buildings in fiscal years 2016 and 2017.

• All portions of the initial investment paid to the Company are fully earned by it when paid, and are not refundable.

• Your financing cost may affect your total investment significantly.

1.  Development Fee (if applicable):  $25,000

• When you sign a Development Agreement, you must pay the Company a Development Fee of $25,000 for each site to be developed.

2.  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.

3.  Fee for Trade Area Survey Analysis:  $3,500 to $7,000 (plus all expenses)

• The amount listed is for a single site survey.

4.  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 approximately 25,000 to 40,000 square feet, minimum of 150 feet of frontage, adequate access into and out of the property, ability to accept deliveries from a 57′ tractor-trailer truck, and a dedicated parking area to accommodate 19-40 spaces depending on site-specific requirements.

5.  Fee for Architect/Engineering Services:  $85,000 to $225,000

6.  Environmental Assessment:  $2,500 to $34,000

• Environmental assessment costs tend to be site-specific in nature and can vary based upon where a property is located, a property’s former use(s), the use(s) of neighboring properties, and a property’s existing conditions.

7.  On-Site Improvements:  $175,000 to $775,000

• On-site improvements can include excavation, grading, sub-surface stabilization, paving, sidewalks, landscaping and irrigation, trash enclosure structures, fences, retaining walls, drainage structures, utility work, and outdoor lighting, among other things.

• Off-site development costs, if any, are by nature site-specific and have been excluded.

8.  Building Improvements:  $525,000 to $1,100,000

• The Company compiled these estimates based on its experience building its prototypical building where there were no unusual conditions such as special architecture or finishes.

• This estimate does not include costs of building permits; on-site or off-site site improvements, which have been discussed in (7) above.

• Construction costs will vary widely depending upon size of the building, material and methods specified in the construction documents, as well as other geographical, regional, and municipal influences.

9.  Furniture, Fixtures, and Equipment:  $375,000 to $500,000

• Furniture, fixtures, and equipment costs are affected by the sign package, kitchen configuration, and dining room size. Excludes security equipment.

10.  IT Equipment and Installation:  $45,000 to $60,000

• Includes purchase and installation of back-office PC, web-based mobile training device, point-of-sale system, kitchen display equipment, speed of service equipment, network infrastructure equipment, and order confirmation system.

11.  Computer-Related Services and Licensing:  $1,000

• The computer-related licensing fees are for the POS software.

12.  Initial Inventory:  $12,000 to $20,000

13.  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.

14.  Pre-Opening Additional Funds:  $14,000 to $17,000

• Pre-opening additional funds include any miscellaneous expenses required before the restaurant opens, but exclude the following: rent related items, property taxes, labor, and food cost.

15.  Uniforms:  $1,500 to $3,000

16.  Operating Cash:  $1,200 to $3,000

17.  Business Licenses and Utility Deposits:  $500 to $3,000

• Business licenses and utility deposit costs vary greatly by municipality and state.

18.  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).

• It excludes income taxes, officer compensation, workers’ compensation insurance, property insurance, general and administrative expenses, interest, other income and expense, royalties, marketing fees, depreciation, rent, taxes and license expenses, other labor expenses, bonuses, travel expenses, and cash overage/shortage.

• You may have additional expenses starting the business. Costs may vary widely depending upon your restaurant location, sales volume, staffing choices, management skill and experience, economic conditions, the labor market, and competition.

19.  Total Estimated Cost for Prototypical MK9 or MK10-Style Restaurant (excluding land, financing, and certain other costs):  $1,481,500 to $3,336,600

• Financing rates, lease rates, cash injection, loan or lease fees, creditworthiness, lender selection and interest rates, closing costs, and other factors may vary greatly, and will significantly affect your initial investment.

• The Company may offer some limited financing.