Does the Del Taco FDD mention any bankruptcy cases involving Jack in the Box franchisees?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
In April 2017, Jack in the Box Inc. ("JIB") and Jack in the Box Eastern Division L.P. (collectively the "JIB Parties") filed a case against J&D Restaurant Group, LLC ("J&D") and Bernard J. Morrissey ("BJM") after BJM defaulted under various franchise agreements ("State Court Action").
On May 19, 2017, J&D filed a Chapter 7 petition (Case No. 17-42099) in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division ("Franchisee Bankruptcy Filing").
The State Court action was stayed as a result of the Franchisee Bankruptcy Filing.
On April 17, 2019, Marilyn Garner, as Chapter 7 Trustee ("Trustee"), filed a petition in intervention in the State Court Case asserting claims against JIB Parties.
Source: Item 3 — LITIGATION (FDD pages 12–16)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, Item 3, Litigation, includes information about a bankruptcy case involving a Jack in the Box franchisee. Specifically, J&D Restaurant Group, LLC filed a Chapter 7 petition on May 19, 2017, which resulted in a stay of a State Court action initiated by Jack in the Box Inc. against J&D and Bernard J. Morrissey due to defaults under franchise agreements. This indicates that at least one Jack in the Box franchisee has been involved in bankruptcy proceedings.
The FDD outlines the details of the legal actions taken before and after the bankruptcy filing. Marilyn Garner, as Chapter 7 Trustee, later intervened in the State Court Case, asserting claims against Jack in the Box Parties. This intervention indicates that the bankruptcy case had implications for the franchise agreements and potentially involved claims of mismanagement or improper termination of the agreements.
For a potential Del Taco franchisee, this information highlights the importance of understanding the financial stability and litigation history of the parent company, JIB, and its franchisees. While this litigation does not directly involve Del Taco, it provides insight into the types of legal and financial challenges that can arise within a franchise system and the potential impact of franchisee bankruptcies on the franchisor's legal and operational landscape. It is important to note that Del Taco is owned by JIB, so understanding the litigation history of JIB is important for a potential franchisee.