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Jack In The Box Franchise Cost Over $2M (Average For 2022)

Written by: Owen Boyd
Last Updated: January 24, 2022
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jack in the box franchise cost

Jack in the Box is a quick-serve restaurant that serves foods like hamburgers, specialty sandwiches, french fries, tacos, salads, bowls, drinks, and sides. Among their popular menu items are their tacos, the signature “Jumbo Jack burger, and waffle breakfast sandwich. 

Jack in the Box born in San Diego in 1951, and now there are over 2,200 locations. The current CEO is Darin Harris, who also serves as an Executive Vice President and director and has been with the company since June 2020. Previously, Harris was CEO of Regus North America and CiCi’s Pizza.

How is Jack in the Box Positioned in the Fast Food Industry?

Jack in the Box competes in the fast-food industry against big brands like McDonald’s, Burger King, and Wendy’s, as well as other nearby Jack in the Box locations. The Fast Food industry collected $278.6 billion in revenue in the last year, and it is expected to grow by 3.2% over the next five years. Distinguishes itself with its large and distinctive menu. 

 

JACK IN THE BOX, Buellton - Restaurant Reviews, Photos & Phone Number - Tripadvisor


How Much is a Jack in the Box
Franchise?

The initial Jack in the Box Franchise Fee is typical $50,000. You have to pay this upfront fee when opening.

Jack in the Box Franchise Cost

The estimated total investment necessary to begin the operation of a Jack in the Box Franchise ranges from $1,651,500 to $2,638,600. 

The following costs are part of the upfront costs included in the initial investment for a Jack in the Box franchise. Many of these are one-time fees that are needed to launch the franchise.

Review the chart below:  

Jack in the Box Franchise Costs (2021)

Type of ExpenditureEstimated Amount or Estimated Low-High RangeMethod of PaymentWhen dueTo Whom Made
 LowHigh   
Initial Franchise Fee050,000Lump SumAt signing of Franchise AgreementrUs
Fee for trade area surveys analysis4,500 (plus all expenses)7,000 (plus all expenses)Lump SumAs agreedUs
LandNot included    
Fee for architect/engineering services49,000166,000As agreedAs agreedConsultants
Environmental assessment2,50034,000As agreedAs agreedConsultants
On-site improvements286,000507,000As agreedAs agreedContractos, Vendors, Suppliers
Building Improvements611,000785,000As agreedAs agreedContractos, Vendors, Suppliers
Furniture, fixtures and equipment408,000469,000As agreedAs agreedSuppliers
IT equipment and installation45,00060,000As agreedAs agreedUs or suppliers
Computer-related services and licensing1,0001,000As agreedPrimarilyUs
Initial Inventory12,00020,000As agreedAs incurredSuppliers
Pre-opening training and inventory expenses50,00055,000As agreedAs incurredEmployees
Pre-opening additional funds14,00017,000As agreedAs incurredSuppliers
Uniforms1,5003,000As agreedAs incurredSuppliers
Operating cash1,2003,000As agreedAs incurredUtilities
Business licenses and utility deposits5003,000As agreedAs incurredUtilities
Additional funds (3 months)165,300458,600As agreedAs incurredEmployees, suppliers, utilities
Total estimated cost for prototypical MK9 or MK10-Style restaurant (excluding land, financing and certain other costs)1,651,5002,638,600   
Development Fee60,00060,000Lump SumAt signing of Development AgreementUs
Professional Fee1,0005,000As incurredAs incurredThird parties
Total Estimated Initial Investment for Two (1) Jack in the Box Restaurants (based upon high / low ranges from Table Above)3,303,0005,277,200See Table Above for Each ExpenditureTable Above for Each ExpenditureSee Table Above for Each Expenditure
Total Estimated Initial Investment for a Development Agreement3,364,0005,342,200   

Franchise Requirements

Jack in the Box doesn’t list specific requirements for potential franchisees. But they must go through the five-part approval process detailed below:

  1. Pre-Qualification: Preliminary interview, review of Jack in the Box Franchise Disclosure Document, preliminary review of franchisee background and credit
  2. Qualification: In-depth competency interview, Jack in the Box restaurant preview, a closer look at financials
  3. Due Diligence: Review of tax returns, real estate information, and business plan
  4. Approval: Panel interview with Jack in the Box leadership team, 10-week training
  5. Post-Approval: Final paperwork, orientation

Ongoing Fees

Royalty: 5% of gross sales

Royalty for Games and Devices: 40% of net revenues from games and devices

Marketing Fee: 5% of gross sales

Why Choose Our Quick-Service Hamburger Chain? | Jack in the Box Franchise

How much do owners make?

Historical Gross Sales 2019

 Average Gross Sales by Tier# of Units above Average% of Units above AverageHigh Gross SalesMedian Gross SalesLow Gross SalesTotal Unit Count
Top2,069,49126240.4%4,092,7561,997,4511,705,874649
Middle1,481,59129946.1%1,705,4961,468,2291,265,142648
Bottom994,33335855.2%1,264,4321,026,705379,071648
Total1,515,42391146.8%4,092,7561,468,239379,0711,945

Historical Gross Sales 2020

 Average Gross Sales by Tier# of Units above Average% of Units above AverageHigh Gross SalesMedian Gross SalesLow Gross SalesTotal Unit Count
Top2,230,46824939.3%4,639,1872,139,0941,829,661633
Middle1,582,12931149.1%1,827,8471,574,5991,355,103633
Bottom1,047,47335756.5%1,354,5901,080,760352,915632
Total1,620,32589247.0%4,639,1871,575,246352,9151898

Historical Average Gross and Median Sales

 20202019
 Average Gross SalesMedian Gross Sales# Greater than Average% Greater than AverageAverage Gross SalesMedian Gross Sales# Greater than Average% Greater than Average
Gross Sales100.00%100.00%89247.0%100.00%100.00%91146.8%
Cost of Sales27.5%27.7%89547.2%28.0%28.1%90846.7%
Production Labor22.6%22.4%86545.6%22.9%22.7%97645.0%
Management Comp3.6%3.5%80642.5%3.7%3.6%81441.9%
Payroll Taxes/Ins3.6%3.5%87145.9%3.8%3.8%86644.5%
Total Labor29.8%29.6%86945.8%30.5%30.3%88345.4%
Gross Profit42.7%42.6%90247.5%41.5%41.7%92947.8%
Operating Costs        
Advertising4.9%5.0%88946.8%5.1%5.1%93047.8%
Royalty5.1%5.0%83043.7%5.2%5.0%85443.9%
Utilities3.2%3.1%82643.5%3.4%3.3%85143.8%
Other Occupancy11.6%11.7%91248.1%11.6%11.8%94548.6
Other6.7%6.6%80342.3%6.5%6.5%82942.6%
Total Operating Costs31.6%31.5%86345.5%31.7%31.7%88545.5%
Operating Margin11.1%11.1%92648.8%9.8%9.9%95148.9%
EBITDA12.7%12.5%90847.8%11.2%11.2%94348.5%
EBITDAR22.2%22.1%90747.8%20.9%21.0%94348.5%

The median gross sales for all franchises were $1,468,239 in 2019 and $1,575,246 in 2020. 

In 2019, based on a midpoint investment of $2,145,050 with estimated profits of $164,443 (11.2% profit margin), it would take about 15 years to recoup your investment. 

In 2020, based on a midpoint investment of $2,145,050 with estimated profits of $196,906 (12.5% profit margin), it would take about 13 years to recoup your investment. 

These estimates account for the approximate 2.5 years that it typically takes for franchises in the food and beverage industry to scale up. 

Jack in the Box Franchisees Call for CEO Ouster | QSR magazine

Is the Jack in the Box Franchise Profit Worth the Franchise Cost?

When owners sell their franchise based on the median valuation multiple for the industry of 0.34. And the average sales total from 2019 and 2020 of $1,521,743, the franchise would sell for $517,393. This is only about 24% of the midpoint investment of $2,145,050

SPV Guarantor, LLC and Subsidiaries Income Statement:

JACK IN THE BOX CONSOLIDATED STATEMENTS OF EARNING

 September 27,2020July 8, 2019 to September 29, 2019
Revenues  
Company Restaurant Sales342,85078,859
Franchise reveal revenues204,31741,046
Franchise royalties and other177,31239,768
Franchise contributions for advertising other services168,81238,657
Revenue from affiliates800 
Total revenue894,091198,330
Operating costs and expenses  
Food and packaging100,49523,385
Payroll and employee benefits104,37223,990
Occupancy and other52,96112,337
Franchise occupancy expenses124,93023,237
Franchise support and other costs1,237518
Franchise advertising and other services expenses170,27738,657
Managament fees40,68812,253
Selling, general and administrative expenses17,3104,354
Depreciation and amortization35,6598,386
Impairment and other charges, net66814
Total costs and expenses348,597147,131
Earning from operations245,49451,199
Interest expenes, net66,98415,303
Net earnings178,51035,896

Jack in the Box SPV Guarantor, LLC and Subsidiaries provide their income statement from its inception in July 2019 to September 2019 and then from September 2019 to September 2020. When the two-month figures from 2019 are projected over a full year, net earnings increased by about 15% from about $155,789 to $178,510. A significant portion of this increase is accounted for by a 15% increase in franchise rental revenues from about $178,140 to $204,317. 

How many units have opened and closed?

System-wide Outlet Summary

Outlet typeYearOutlets at the Start of the YearOutlets at the End of the YearNet Change
Franchised201819752100+125
201921002106+6
202021062097-9
Company-Owned2018276137-139
20191371370
2020137144+7
Total Outlets201822512237-14
201922372243+6
202022432241-2

By 2020, there were ten less locations than there were in 2018. Decreasing by 0.44% from 2251 outlets to 2241 units. 

Conclusion

While high revenues and moderate profit margins make Jack in the Box franchises attractive. There is a very high initial investment cost. And they sell for significantly lower than the initial investment amount. Additionally, it typically takes over ten years to recoup the initial investment. And the total number of outlets is not growing. Best explore other franchise opportunities in 2022 on our portal

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