Jack_In_The_Box 2025 Franchise FAQ - FDD Ninja

Question 1

In 2024, what was the total consideration paid by Del Taco to purchase franchise-operated restaurants from Jack In The Box franchisees?

Accepted Answer

of \$1.5 million, \$0.9 million, and \$1.4 million, respectively, related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years.

Franchise acquisitions — In 2024, Del Taco purchased 10 franchise-operated restaurants for \$86 thousand as part of three separate transactions, and recognized related gains of \$2.7 million. In 2022, Jack in the Box acquired 13 franchise restaurants for total consideration of \$0.3 million, comprised of franchise receivables owed to the Company as of the acquisition date. There were no such acquisitions in 2023. We account for the acquisition of franchised restaurants using the ac

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 2

What actions are Jack In The Box franchisees prohibited from taking with confidential information, both during and after the term of the franchise agreement?

Accepted Answer

Franchisee acknowledges that Franchisor and the software authors have expended considerable time and money to develop the Technology System and/or Technology Services, the content of which is not generally known by others, and Franchisor the software authors wish to maintain the confidentiality of the Technology System and/or Technology Services. Accordingly, Franchisee must not at any time disclose the content of any part of the Technology System and/or Technology Services (including, but not limited to the password(s) necessary to obtain access to and use either) to any person, firm, organization or employee that does not need to obtain access to the Technology System and/or Technology Services to assist with the operation of the Restaurant(s), and Franchisee may not provide or allow access to or use of the Technology System and/or Technology Services to any third-party without Franchisor's

prior written approval. Franchisee also may not use the Technology System and/or Technology Services for the benefit of any third-party. This non-disclosure provision supplements, rather than replaces, Franchisee's obligation not to disclose or use Franchisor Confidential Information, as set forth in any Franchise Agreement or other agreement or documentation signed by Franchisee. This non-disclosure provision survives the termination of these Terms and Conditions, regardless of the reason for the termination.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 3

How many closed Jack In The Box restaurants listed in the table were owned by Steve Wazny?

Accepted Answer

LAURA CINCIUKAITE Yakima 8300 2317 S First St 98903 509-248-3796 WA FEAST Foods, LLC SHAYNE STIMPSON Yakima 8315 1002 N 1st St 98901 509-452-5260 WA FEAST Foods, LLC SHAYNE STIMPSON Yakima 8494 3907 Tieton Dr 98902 509-972-4368 WA FEAST Foods, LLC SHAYNE STIMPSON Yelm 8336 1001 E Yelm Ave 98597 360-400-5225 WA AJP Enterprises, LLC STEVE WAZNY

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 4

How many company-owned and franchised Jack in the Box restaurants were there as of September 29, 2024?

Accepted Answer

As of September 29, 2024, there were 150 company owned Jack in the Box restaurants, and 2,040 franchised *Jack in the Box* restaurants (or "outlets"). The

company owned Jack in the Box restaurants are operated by our affiliate, Jack in the Box Properties, LLC ("JIB Properties").

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 5

What was the total number of Jack In The Box franchise outlet transfers across all states in the year 2022?

Accepted Answer

| State | Year | Number of Transfers |
|---|---|---|
| California | 2022 | 31 |
|  | 2023 | 3 |
|  | 2024 | 23 |
| State | Year | Number of Transfers |
| Hawaii | 2022 | 0 |
|  | 2023 | 28 |
|  | 2024 | 0 |
| Louisiana | 2022 | 16 |
|  | 2023 | 0 |
|  | 2024 | 0 |
| North Carolina | 2022 | 18 |
|  | 2023 | 0 |
|  | 2024 | 0 |
| Oregon | 2022 | 0 |
|  | 2023 | 0 |
|  | 2024 | 41 |
| South Carolina | 2022 | 8 |
|  | 2023 | 0 |
|  | 2024 | 0 |
| Texas | 2022 | 0 |
|  | 2023 | 14 |
|  | 2024 | 30 |
| Total | 2022 | 73 |
|  | 2023 | 45 |
|  | 2024 | 94 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 87–93)

Question 6

What was the total number of Jack In The Box outlets closed across all states in 2023?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Outlets Reacquired From Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of Year |
|---|---|---|---|---|---|---|---|
| California | 2022 | 107 | 0 | 0 | 0 | 6 | 101 |
|  | 2023 | 101 | 0 | 0 | 1 | 3 | 97 |
|  | 2024 | 97 | 1 | 0 | 0 | 0 | 98 |
| State/ Territory | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of Year |
|---|---|---|---|---|---|---|---|---|
| Idaho | 2022 | 33 | 1 | 0 | 0 | 0 | 0 | 34 |
|  | 2023 | 34 | 0 | 0 | 0 | 0 | 1 | 33 |
| Missouri | 2022 | 54 | 0 | 16 | 0 | 2 | 0 | 36 |
|  | 2023 | 36 | 0 | 0 | 0 | 0 | 2 | 34 |
| Tennessee | 2022 | 9 | 2 | 0 | 0 | 9 | 0 | 2 |
|  | 2023 | 2 | 2 | 0 | 0 | 0 | 0 | 4 |
| Texas | 2022 | 569 | 3 | 11 | 0 | 0 | 0 | 561 |
|  | 2023 | 561 | 7 | 0 | 2 | 0 | 3 | 563 |
| Washington | 2022 | 147 | 0 | 0 | 0 | 0 | 0 | 147 |
|  | 2023 | 147 | 0 | 0 | 0 | 0 | 1 | 146 |
| TOTAL | 2022 | 2055 | 31 | 39 | 0 | 13 | 0 | 2034 |
|  | 2023 | 2034 | 23 | 0 | 4 | 0 | 10 | 2043 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 87–93)

Question 7

What was the total number of Jack In The Box outlets at the end of 2023?

Accepted Answer

| Outlet Type | Year | Outlets At The Start Of The Year | Outlets At The End Of The Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 2055 | 2034 | -21 |
|  | 2023 | 2034 | 2043* | +9 |
|  | 2024 | 2043 | 2040* | -3 |
| Company- | 2022 | 163 | 146 | -17 |
| owned |  |  |  |  |
|  | 2023 | 146 | 142 | -4 |
|  | 2024 | 142 | 150 | +8 |
| Total | 2022 | 2218 | 2180 | -38 |
| Outlets |  |  |  |  |
|  | 2023 | 2180 | 2185 | +5 |
|  | 2024 | 2185 | 2190 | +5 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 87–93)

Question 8

What was the total number of Jack In The Box outlets reacquired from franchisees across all states in fiscal year 2022?

Accepted Answer

022 | 73 |
|  | 2023 | 45 |
|  | 2024 | 94 |TABLE 3 - STATUS OF FRANCHISE OUTLETS FOR FISCAL YEARS 2022 TO 2024

| State/ Territory | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of Year |
|---|---|---|---|---|---|---|---|---|
| Arizona | 2022 | 168 | 3 | 1 | 0 | 0 | 0 | 170 |
|  | 2023 | 170 | 3 | 0 | 0 | 0 | 0 | 173 |
|  | 2024 | 173 | 0 | 0 | 0 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 87–93)

Question 9

What was the total number of Jack In The Box terminations across all locations in 2024?

Accepted Answer

022 | 73 |
|  | 2023 | 45 |
|  | 2024 | 94 |TABLE 3 - STATUS OF FRANCHISE OUTLETS FOR FISCAL YEARS 2022 TO 2024

| State/ Territory | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of Year |
|---|---|---|---|---|---|---|---|---|
| Arizona | 2022 | 168 | 3 | 1 | 0 | 0 | 0 | 170 |
|  | 2023 | 170 | 3 | 0 | 0 | 0 | 0 | 173 |
|  | 2024 | 173 | 0 | 0 | 0 | 0 | 0 | 173 |
| California | 2022 | 835 | 12 | 5 | 0 | 0 | 0 | 842* |
|  | 2023 | 842 | 8 | 0 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 87–93)

Question 10

What is the total projected number of new Jack In The Box outlets, both franchised and company-owned, expected to open in the current fiscal year 2025?

Accepted Answer

| State | Franchise Agreements Signed but Outlets Not Opened (1) | Projected New Franchised Outlets in the Current Fiscal Year 2025 | Projected New Company- Owned Outlets in the Current Fiscal Year 2025 |
|---|---|---|---|
| Arizona | 2 | 2 | 0 |
| California | 24 | 16 | 0 |
| Colorado | 3 | 2 | 0 |
| Florida | 6 | 0 | 0 |
| Illinois | 0 | 0 | 8 |
| Indiana | 1 | 1 | 1 |
| Kentucky | 1 | 1 | 1 |
| Michigan | 1 | 1 | 0 |
| Missouri | 1 | 1 | 0 |
| Tennessee | 1 | 1 | 0 |
| Texas | 21 | 12 | 0 |
| Utah | 5 | 4 | 2 |
| Mexico | 2 | 2 | 0 |
| Total | 68 | 43 | 12 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 87–93)

Question 11

How does the de-identification cost for a Jack In The Box premises in Item 6 relate to the estimated initial investment in Item 7?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| De-identification Costs | Any costs incurred to de- identify the premises | Upon Demand | If you fail to de-identify the premises after termination or expiration and we make nonstructural changes, you must reimburse us for the costs. |
| Type of Expenditure | Estimated Amount or Estimated Low -High Range |  | Method of Payment |
| Initial franchise fee2 | $50,000 | $50,000 | Lump sum |
| Fee for trade | $0 | $7,500 | Lump sum |
| area survey |  | (plus all |  |
| analysis3 |  | expenses) |  |
| Land4 | Not included | Not included | Not included |
| Fee for architect/ | $44,000 | $216,000 | As agreed |
| engineering |  |  |  |
| services5 |  |  |  |
| Environmental | $2,500 | $34,000 | As agreed |
| assessment5, 6 |  |  |  |
| On-site | $337,000 | $825,000 | As agreed |
| improvements7 |  |  |  |

Question 12

What are all the fees a Jack In The Box franchisee might incur before opening, considering both Item 5 and Item 7?

Accepted Answer

[Item 5: INITIAL FEES]

If you sign a Multi-Unit Development Agreement, we grant you the right to construct an agreed-upon number of Jack in the Box restaurants in a specified geographic area. The minimum number of restaurants that can be developed under a Multi-Unit Development Agreement is two (2). If you are a new developer / franchisee to our System, when you sign the Multi-Unit Development Agreement, you must pay us a non-refundable Development Fee, calculated as follows: (a) $50,000 for the first new restaurant; and (b) $10,000 for each additional new restaurant. If you are an existing developer / franchisee with our System, when you sign the Multi-Unit Development Agreement, you must pay us a non-refundable Development Fee equal to $10,000 for each new restaurant. If you are in full compliance with the Multi-Unit Development Agreement and any other agreements with us, we will credit the portion of the Development Fee for the particular restaurant towards the Initial Franchise Fee for that restaurant. The Franchise Fee for each particular restaurant is due when you sign the required Franchise Agreement. During the past fiscal year, the Company collected Development Fees ranging from $0 to $50,000.

[Item 7: Estimated Initial Investment]

- (3) We describe a trade area survey analysis in Item 5. A trade area survey analysis may be required only If you are building a restaurant and would like to locate it within fifteen (15) miles of an existing Jack in the Box restaurant. If you

locate your restaurant outside that range, then you will not be required to pay for a trade area survey analysis. Therefore, the amount listed is the high-end range for a single site survey. The cost of a trade area survey analysis can range from $4,500 to $7,500, plus all expenses, which may vary considerably.

Any cost, including engineering and architectural fees, incurred in obtaining Company review and approvals by the appropriate governmental authorities of the Site Plan, or other plans, specifications and layouts shall be paid by the Developer.

- (11) After the POS System transition is complete, a subscription-based POS Software and support is estimated at $280 a month and covers licenses, software, and support for the configuration described in Note 10 above. Additional software and support fees will apply per item. We anticipate that the fees charged will change over time and will likely increase. If you choose to conduct the implementation and installation, then additional hourly support fees will apply.
- (12) The pre-opening training and inventory expenses in a new market can be significantly higher.
- (14) Business licenses and utility deposits costs vary greatly by municipality and state.

These initial investment figures are based on franchised and Company restaurant development costs to open MK12 prototypical buildings in fiscal years 2023 to 2024. The prototypical buildings range in size from 1,372 square feet to 2,440 square feet.

Question 13

What were the franchise rental revenues for Jack In The Box, and how do they compare to the franchise royalties?

Accepted Answer

agreements.

**Disaggregation of revenue** — The following table disaggregates revenue by segment and primary source for the fiscal year ended September 29, 2024 (in thousands):

|                                   | J  | ack in the Box | Del Taco      | Total           |  |
|-----------------------------------|----|-------------------|---------------|-----------------|--|
| Company restaurant sales          | \$ | 427,057           | \$ 281,978 | \$ 709,035   |  |
| Franchise rental revenues         |    | 347,227           | 28,201        | 375,428         |  |
| Franchise royalties               |    | 198,377           | 31,714        | 230,091         |  |
| Marketing fees                    |    | 197,900           | 26,258        | 224,158         |  |
| Technology a

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 14

How does the Initial Franchise Fee for Jack In The Box in Item 5 relate to the estimated initial investment range in Item 7?

Accepted Answer

We describe the Initial Franchise Fee in Item 5.

When you sign the Franchise Agreement, you must pay the Company an Initial Franchise Fee. 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 Initial 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 six months. If you will be operating at a nontraditional location, the Initial Franchise Fee is $25,000 for each unit, plus any taxes and fees imposed on the Company due to collection of the Initial Franchise Fee. The Initial Franchise Fee is fully earned on the date it is received by the Company, and is nonrefundable.

We may reduce the Initial Franchise Fee or accept installment payments. In the past, we have done this for: (i) sales of existing Company-owned restaurants with restaurant sales significantly below system average and/or with an unusual history of business or management problems; (ii) special incentive programs, which are offered at the discretion of, and subject to such restrictions as may be imposed by, the Company; (iii) settlement of disputes; and (iv) the reopening of certain closed sites or the approved relocation of a franchise (although you have no right to relocate your franchise, and approval of such requests is rare). During the past fiscal year, the Company collected Initial Franchise Fees ranging from $10,000 to $50,000, excluding any franchises for

If you sign a Single Unit Development Agreement with us, it will give you the right to construct one (1) Jack in the Box restaurant. The development fee for this agreement is $50,000, which is non-refundable and if you are in full compliance with the Single Unit Development Agreement and any other agreements with us, we will credit towards the Initial Franchise Fee for the restaurant.

If you sign a Multi-Unit Development Agreement, we grant you the right to construct an agreed-upon number of Jack in the Box restaurants in a specified geographic area. The minimum number of restaurants that can be developed under a Multi-Unit Development Agreement is two (2). If you are a new developer / franchisee to our System, when you sign the Multi-Unit Development Agreement, you must pay us a non-refundable Development Fee, calculated as follows: (a) $50,000 for the first new restaurant; and (b) $10,000 for each additional new restaurant. If you are an existing developer / franchisee with our System, when you sign the Multi-Unit Development Agreement, you must pay us a non-refundable Development Fee equal to $10,000 for each new restaurant. If you are in full compliance with the Multi-Unit Development Agreement and any other agreements with us, we will credit the portion of the Development Fee for the particular restaurant towards the Initial Franchise Fee for that restaurant. The Franchise Fee for each particular restaurant is due when you sign the required Franchise Agreement.

Question 15

How does the Initial Franchise Fee for Jack In The Box, as stated in Item 5, compare to the total estimated initial investment in Item 7?

Accepted Answer

### **Initial Franchise Fee**

When you sign the Franchise Agreement, you must pay the Company an Initial Franchise Fee. 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 Initial 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 six months. If you will be operating at a nontraditional location, the Initial Franchise Fee is \$25,000 for each unit, plus any taxes and fees imposed on the Company due to collection of the Initial Franchise Fee. The Initial Franchise Fee is fully earned on the date it is received by the Company, and is nonrefundable.

We may reduce the Initial Franchise Fee or accept installment payments. In the past, we have done this for: (i) sales of existing Company-owned restaurants with restaurant sales significantly below system average and/or with an unusual history of business or management problems; (ii) special incentive programs, which are offered at the discretion of, and subject to such restrictions as may be imposed by, the Company; (iii) settlement of disputes; and (iv) the reopening of certain closed sites or the approved relocation of a franchise (although you have no right to relocate your franchise, and approval of such requests is rare). During the past fiscal year, the Company collected Initial Franchise Fees ranging from \$10,000 to \$50,000, excluding any franchises for

which the fee was waived pursuant to our previous Development Incentive Program (discussed below), or otherwise.

#### **Development Fee**

If you sign a Single Unit Development Agreement with us, it will give you the right to construct one (1) Jack in the Box restaurant. The development fee for this agreement is \$50,000, which is non-refundable and if you are in full compliance with the Single Unit Development Agreement and any other agreements with us, we will credit towards the Initial Franchise Fee for the restaurant.

If you sign a Multi-Unit Development Agreement, we grant you the right to construct an agreed-upon number of Jack in the Box restaurants in a specified geographic area. The minimum number of restaurants that can be developed under a Multi-Unit Development Agreement is two (2). If you are a new developer / franchisee to our System, when you sign the Multi-Unit Development Agreement, you must pay us a non-refundable Development Fee, calculated as follows: (a) \$50,000 for the first new restaurant; and (b) \$10,000 for each additional new restaurant. If you are an existing developer / franchisee with our System, when you sign the Multi-Unit Development Agreement, you must pay us a non-refundable Development Fee equal to \$10,000 for each new restaurant. If you are in full compliance with the Multi-Unit Development Agreement and any other agreements with us, we will credit the portion of the Development Fee for the particular restaurant towards the Initial Franchise Fee for that restaurant. The Franchise Fee for each particular restaurant is due when you sign the required Franchise Agreement. During the past fiscal year, the Company collected Development Fees ranging from \$0 to \$50,000.

Question 16

What is the maximum financial exposure for a Jack In The Box franchisee, considering the initial franchise fee in Item 5, the estimated initial investment range in Item 7, and any potential costs associated with de-identification of the premises (Item 6)?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| De-identification Costs | Any costs incurred to de- identify the premises | Upon Demand | If you fail to de-identify the premises after termination or expiration and we make nonstructural changes, you must reimburse us for the costs. |
| Type of Expenditure | Estimated Amount or Estimated Low -High Range |  | Method of Payment |
| Initial franchise fee2 | $50,000 | $50,000 | Lump sum |
| Fee for trade | $0 | $7,500 | Lump sum |
| area survey |  | (plus all |  |
| analysis3 |  | expenses) |  |
| Land4 | Not included | Not included | Not included |
| Fee for architect/ | $44,000 | $216,000 | As agreed |
| engineering |  |  |  |
| services5 |  |  |  |
| Environmental | $2,500 | $34,000 | As agreed |
| assessment5, 6 |  |  |  |
| On-site | $337,000 | $825,000 | As agreed |
| improvements7 |  |  |  |

Question 17

What is the relationship between the Initial Franchise Fee for Jack In The Box described in Item 5 and the Initial Franchise Fee listed in the table in Item 6?

Accepted Answer

### **Initial Franchise Fee**

When you sign the Franchise Agreement, you must pay the Company an Initial Franchise Fee. 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 Initial 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 six months. If you will be operating at a nontraditional location, the Initial Franchise Fee is \$25,000 for each unit, plus any taxes and fees imposed on the Company due to collection of the Initial Franchise Fee. The Initial Franchise Fee is fully earned on the date it is received by the Company, and is nonrefundable.

We may reduce the Initial Franchise Fee or accept installment payments. In the past, we have done this for: (i) sales of existing Company-owned restaurants with restaurant sales significantly below system average and/or with an unusual history of business or management problems; (ii) special incentive programs, which are offered at the discretion of, and subject to such restrictions as may be imposed by, the Company; (iii) settlement of disputes; and (iv) the reopening of certain closed sites or the approved relocation of a franchise (although you have no right to relocate your franchise, and approval of such requests is rare). During the past fiscal year, the Company collected Initial Franchise Fees ranging from \$10,000 to \$50,000, excluding any franchises for

which the fee was waived pursuant to our previous Development Incentive Program (dis

Question 18

What is the relationship between the Initial Franchise Fee for Jack In The Box in Item 5 and the ongoing fees that might be incurred as a franchisee, based on Item 6?

Accepted Answer

scontinue this program at any time.

#### **Veterans Program**

We participate in the International Franchise Association's Veterans Transition Franchise Initiative ("**VetFran**") to provide franchise opportunities to qualifying veterans. Our VetFran incentive is called the Jack in the Box Veterans Program ("**Veterans Program**"). Under the Veterans Program, we reduce the Initial Franchise Fee for the first new Restaurant by 25%, or \$12,500. Accordingly, the Initial Franchise Fee paid to us is \$37,500. This incentive may not be combined with any other incentive program. To qualify for the Veterans Program, a prospective franchisee must: request the Veterans Program at the time of application; meet our then-current qualifications for new franchisees; be at least 51% legally and beneficially owned by persons meeting our qualifying veteran status; not have previously received a similar incentive from us. The Company may discontinue or m

Question 19

What are the specific Percentage Rent rates for Jack In The Box franchises in sale/leaseback transactions versus ground lease transactions?

Accepted Answer

**In addition to the Fixed Minimum Rent, throughout the term of this Lease, Tenant covenants and agrees to pay to Landlord an amount ("Percentage Rent") equal to percent ( %) of the Gross Sales at the Premises for each calendar month or portion thereof during such term, LESS the amount paid by Tenant as Fixed Minimum Rent during such month. [Note, Percentage Rent for these type of transactions will be 9.5% for sale/leaseback transactions OR 10.5% for ground lease transactions]**

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 20

What is the total cost of opening a Jack In The Box franchise, considering the initial franchise fee in Item 5, the estimated initial investment range in Item 7, and any potential de-identification costs in Item 6?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| De-identification Costs | Any costs incurred to de- identify the premises | Upon Demand | If you fail to de-identify the premises after termination or expiration and we make nonstructural changes, you must reimburse us for the costs. |
| Type of Expenditure | Estimated Amount or Estimated Low -High Range |  | Method of Payment |
| Initial franchise fee2 | $50,000 | $50,000 | Lump sum |
| Fee for trade | $0 | $7,500 | Lump sum |
| area survey |  | (plus all |  |
| analysis3 |  | expenses) |  |
| Land4 | Not included | Not included | Not included |
| Fee for architect/ | $44,000 | $216,000 | As agreed |
| engineering |  |  |  |
| services5 |  |  |  |
| Environmental | $2,500 | $34,000 | As agreed |
| assessment5, 6 |  |  |  |
| On-site | $337,000 | $825,000 | As agreed |
| improvements7 |  |  |  |

Question 21

What is the total estimated initial investment for a Jack In The Box franchise, considering the initial franchise fee in Item 5 and the other expenditures listed in Item 7?

Accepted Answer

ed sites are refundable.

## **ITEM 6 OTHER FEES**

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| De-identification Costs | Any costs incurred to de- identify the premises | Upon Demand | If you fail to de-identify the premises after termination or expiration and we make nonstructural changes, you must reimburse us for the costs. |
| Type of Expenditure | Estimated Amount or Estimated Low -High Range |  | Method of Payment |
| Initial franchise fee2 | $50,000 | $50,000 | Lump sum |
| Fee for trade | $0 | $7,500 | Lump sum |
| area survey |  | (plus all |  |
| analysis3 |  | expenses) |  |
| Land4 | Not included | Not included | Not included |
| Fee for architect/ | $44,000 | $216,000 | As agreed |
| engineering |  |  |  |
| services5 |  |  |  |
| Environmental | $2,500 | $34,000 | As agreed |
| assessment5, 6 |  |  |  |
| On-site | $337,000 | $825,000 | As agreed |
| improvements7 |  |  |  |
| Type of Fee | Amount | Due Date | Remarks determining minimum rent is the greater of: (i) underlying rent under the master lease for the restaurant location; or (ii) 9.5% of 90% of trailing 52-week sales at the restaurant. The typical percentage rent is 9.5% of Gross Sales. For new restaurant openings in which you lease the restaurant location from us, minimum rent is determined based upon the terms set forth in the applicable Development Agreement (currently 105% of underlying master lease rent). In certain circumstances, the percentage rent may be lower. |
| Cure Under Lease by Us | All costs we incur | Upon Demand | If you fail to perform any obligation under the lease, we may cure the default and you must pay all costs we incur along with interest.

Question 22

What is the total financial risk associated with opening a Jack In The Box franchise, considering the initial franchise fee in Item 5, the estimated initial investment range in Item 7, and any potential liabilities arising from litigation (Item 3)?

Accepted Answer

[Item 5: INITIAL FEES]

This section describes payments you must make to us or our affiliates before your business opens.

#### **Initial Franchise Fee**

When you sign the Franchise Agreement, you must pay the Company an Initial Franchise Fee. 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 Initial 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 six months. If you will be operating at a nontraditional location, the Initial Franchise Fee is $25,000 for each unit, plus any taxes and fees imposed on the Company due to collection of the Initial Franchise Fee. The Initial Franchise Fee is fully earned on the date it is received by the Company, and is nonrefundable.

We may reduce the Initial Franchise Fee or accept installment payments. In the past, we have done this for: (i) sales of existing Company-owned restaurants with restaurant sales significantly below system average and/or with an unusual history of business or management problems; (ii) special incentive programs, which are offered at the discretion of, and subject to such restrictions as may be imposed by, the Company; (iii) settlement of disputes; and (iv) the reopening of certain closed sites or the approved relocation of a franchise (although you have no right to relocate your franchise, and approval of such requests is rare). During the past fiscal year, the Company collected Initial Franchise Fees ranging from $10,000 to $50,000, excluding any franchises for

which the fee was waived pursuant to our previous Development Incentive Program (discussed below), or otherwise.

#### **Development Fee**

If you sign a Single Unit Development Agreement with us, it will give you the right to construct one (1) Jack in the Box restaurant. The development fee for this agreement is $50,000, which is non-refundable and if you are in full compliance with the Single Unit Development Agreement and any other agreements with us, we will credit towards the Initial Franchise Fee for the restaurant.

[Item 3: LITIGATION]

*Ibrahim Investment Corp., et al. v. Jack in the Box Inc., et al.* (San Diego Superior Court, Case No. 37-2020-00019032). On June 5, 2020, a franchisee filed suit against JIB asserting claims for breach of contract, breach of implied covenant of good faith and fair dealing, promissory estoppel, and specific performance. The franchisee generally claimed JIB made misrepresentations regarding and failed to fully perform under a roof repair and tenant improvement program offered to operators of certain style of restaurant buildings. The franchisee sought modification to several franchise purchase, franchise and/or lease agreements, claiming the franchisee is entitled to relief based on representations by the company or mistaken facts on the part of the franchisee. The franchisee further sought damages associated with a third-party vendor that failed to provide credit card chip reader technology and royalties allegedly paid on sales that were ultimately charged back to the franchisee as a result of fraud claims by customers. The lawsuit was resolved through settlement in April 2021 and the case was dismissed with prejudice on May 11, 2021. Under the settlement agreement, among other things, JIB paid the franchisee $25,000, JIB modified certain rent amounts for various leases, JIB provided the franchisee an early termination right and reduced royalty fee for a Jack in the Box restaurant, the franchisee agreed to purchase from JIB a Jack in the Box location for $600,000 and to build an additional Jack in the Box location, and the parties exchanged mutual release.

Currently Effective Injunctive or Restrictive Orders or Decrees:

In May 1970 the Office of the Attorney General of the State of Missouri notified JIB of its intention to initiate proceedings alleging that JIB had engaged in deceptive advertising by selling or offering for sale "hamburgers" which contained soy grits as an extender. JIB executed a consent decree dated May 28, 1970 (No. 31899 Equity), filed in the Circuit Court of St. Louis County, Missouri, which prohibits JIB from selling, offering for sale or advertising any substance as "hamburger" that is not fresh chopped or ground beef, with or without the addition of beef fat or seasoning, containing not more than 30% of fat, in the State of Missouri.

[Item 7: Estimated Initial Investment]

- (3) We describe a trade area survey analysis in Item 5. A trade area survey analysis may be required only If you are building a restaurant and would like to locate it within fifteen (15) miles of an existing Jack in the Box restaurant. If you

locate your restaurant outside that range, then you will not be required to pay for a trade area survey analysis. Therefore, the amount listed is the high-end range for a single site survey. The cost of a trade area survey analysis can range from $4,500 to $7,500, plus all expenses, which may vary considerably.

- (11) After the POS System transition is complete, a subscription-based POS Software and support is estimated at $280 a month and covers licenses, software, and support for the configuration described in Note 10 above. Additional software and support fees will apply per item.

#### **Development Incentive Program**

We offer an incentive to qualified developers. Under our current Development Incentive Program, if you sign a Development Agreement for a minimum of three (3) restaurants to be developed and opened under the development schedule during the time frames specified in the Development Agreement, and certain other requirements are met, you may be eligible for the following incentive, at our sole discretion:

If you open the Restaurant on or before the required date in the development schedule, we will loan you $150,000 at 0% interest to be used solely for development costs associated with that restaurant. The loan will be repaid by crediting 100% of the royalty payments for that restaurant otherwise due until the loan is paid in full (i.e., payments will be made by crediting the appropriate portion of royalty payments toward the principal balance outstanding). If the particular restaurant is sold or permanently closed and the loan has not been fully repaid, the remaining principal balance is due in full.

Question 23

What is the total potential financial loss for a Jack In The Box franchisee, considering the initial franchise fee in Item 5, the estimated initial investment range in Item 7, and any potential costs associated with litigation (Item 3) or de-identification of the premises (Item 6)?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| De-identification Costs | Any costs incurred to de- identify the premises | Upon Demand | If you fail to de-identify the premises after termination or expiration and we make nonstructural changes, you must reimburse us for the costs. |
| Type of Expenditure | Estimated Amount or Estimated Low -High Range |  | Method of Payment |
| Initial franchise fee2 | $50,000 | $50,000 | Lump sum |
| Fee for trade | $0 | $7,500 | Lump sum |
| area survey |  | (plus all |  |
| analysis3 |  | expenses) |  |
| Land4 | Not included | Not included | Not included |
| Fee for architect/ | $44,000 | $216,000 | As agreed |
| engineering |  |  |  |
| services5 |  |  |  |
| Environmental | $2,500 | $34,000 | As agreed |
| assessment5, 6 |  |  |  |
| On-site | $337,000 | $825,000 | As agreed |
| improvements7 |  |  |  |

Question 24

What was the weighted-average grant date fair value of performance share awards granted by Jack In The Box in fiscal years 2024, 2023, and 2022?

Accepted Answer

|                                                             | Shares   | Average Grant Date Fair Value |
|-------------------------------------------------------------|----------|-------------------------------|
| Performance share awards outstanding at October 1, 2023     | 107,174  | \$ 72.51                   |
| Granted                                                     | 62,103   | \$ 70.19                   |
| Issued                                                      | (29,922) | \$ 88.88                   |
| Forfeited                                                   | (4,162)  | \$ 69.26                   |
| Performance adjustments                                     | 9,974    | \$ 88.88                   |
| Performance share awards outstanding at September 29, 2024. | 145,167  | \$ 70.53                   |
|                                                             |          |                               |

As of September 29, 2024, there was approximately \$3.0 million of total unrecognized compensation cost related to performance share awards, which is expected to be recognized over a weighted-average period of 1.9 years. The weighted-average grant date fair value of awards granted was \$70.19, \$65.74, and \$78

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 25

Under what circumstances is an attempt by a Jack In The Box franchisee to assign, sublicense, rent, lease, or otherwise transfer the Terms and Conditions considered void and a breach?

Accepted Answer

- B. Any purported Transfer contrary to the provisions of this Agreement shall constitute a default under this Agreement and shall for purposes of any agreements with the Company, and to the extent permitted by law, be void and of no force or effect.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 26

Under what condition is a Jack In The Box tenant prohibited from recording the lease?

Accepted Answer

If Developer leases the real property for any Developed Restaurant from a third party, Developer must use its best efforts to use Company's standard form of lease addendum.

Regardless of whether Company's standard form is used, all third-party leases must include the following terms and conditions:

- (6) A Memorandum of Lease will be recorded in the appropriate recorder's office in the county in which the Developed Restaurant is located.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 27

In Washington, when does a provision requiring a Jack In The Box franchisee to reimburse the franchisor for court costs or expenses, including attorneys' fees, apply?

Accepted Answer

- 14.

If the Franchise Agreement or related agreements require a franchisee to reimburse the franchisor for court costs or expenses, including attorneys' fees, such provision applies only if the franchisor is the prevailing party in any judicial or arbitration proceeding.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 28

According to the addendum, what happens if there is a conflict between the terms of the addendum and the Development Agreement for Jack In The Box?

Accepted Answer

| This Addendum ("Addendum") is incorporated into that certain Development Agreement, dated ("Agreement"), by and between Different Rules, LLC, a Delaware limited liability company (hereinafter "Company"), and (collectively, "Developer"). Except as expressly provided in this Addendum, all terms used in this Addendum shall have the meanings established for those terms in the main body of the Agreement. In the event of any conflict between the terms and provisions of this Addendum and the Agreement, the terms and provisions of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 29

According to the Jack In The Box Developer Agreement, what conditions must be met before the company is obligated to enter into a Franchise Agreement for a restaurant?

Accepted Answer

Nothing in this Agreement shall be construed as obligating Company to enter into a Franchise Agreement with respect to any restaurant if Developer has not obtained Expansion Approval, Site Approval and Lease Approval in accordance with Section 8 and/or if Developer is otherwise in breach of any of its obligations under this Agreement.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 30

According to the Jack In The Box franchise agreement, what constitutes a default under the franchise agreement if the franchisee defaults on another agreement with the company?

Accepted Answer

Franchisee fails to comply with any other provision of this Agreement or defaults under any other franchise agreement, development agreement, lease agreement, note, or any agreement or account for the purchase of product or services between Company and Franchisee, whether or not pertaining to the premises.

Franchisee will have thirty (30) days to correct such condition.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 31

According to the franchise agreement, what happens if the Amendment is inconsistent with any terms or conditions of the Jack In The Box agreement?

Accepted Answer

- 2. To the extent this Amendment is deemed to be inconsistent with any terms or conditions of the Agreement, the terms of this Amendment shall govern.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 32

According to the Jack In The Box Franchise Agreement, what law governs the agreement, and are there any exceptions to this choice of law?

Accepted Answer

## **ILLINOIS FRANCHISE AGREEMENT AMENDMENT**

To comply with the requirements of the Illinois Franchise Disclosure Act (Ill. Comp. Stat. §§ 705/1 to 705/44, (the "Act"), the parties to the attached JACK IN THE BOX FRANCHISE AGREEMENT (the "Agreement") agree as follows:

1. The following is added to the end of Section 2. of the Agreement:

Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.

2. The following is added to the Agreement:

Illinois law governs the Franchise Agreement.

In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.

Your rights upon Termination and Non-Renewal of an agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.

In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.

- 3. No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of Company. This provision supersedes any other term of any document executed in connection with the franchise.
- 4. To the extent this Amendment is deemed to be inconsistent with any terms or conditions of the Agreement, the terms of this Amendment shall govern.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 33

According to the Hawaii Development Agreement Amendment, if Jack In The Box refuses to renew development rights in Hawaii for the purpose of converting the Developer's business to one owned and operated by Jack In The Box, what additional compensation is the Developer entitled to?

Accepted Answer

3. The following new Section 16D is added:
  - D. Notwithstanding anything to the contrary in this Section 16, Company shall comply with Hawaii law which currently requires that Company compensate Developer upon termination or refusal to renew the development rights for the fair market value, at the time of the termination or expiration of the development rights, of any inventory, supplies, equipment and furnishings which were purchased from Company or a supplier designated by Company. Personalized materials which have no value to Company need not be compensated for. If Company refuses to renew development rights for the purpose of converting Developer's business to one owned and operated by Company, Company, in addition, must compensate Developer for the loss of goodwill. Company may deduct reasonable costs incurred in removing, transporting and disposing of Developer's inventory, supplies, equipment and furnishings pursuant to these requirements, and may offset any moneys due Company.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 34

According to the Jack In The Box lease agreement, if the landlord's rent increases under the Master Lease, how does this affect the tenant's financial obligations, and what specific types of rent or charges are subject to this increase?

Accepted Answer

In the event of any increase in the rent, percentage rent, or other charges or obligations of Landlord as lessee under the Master Lease, the amount of the monthly increase in such rent (or if the increase is an increase in the rate of percentage rent then the rate of percentage rent payable by Tenant under this Lease shall be increased by the same amount), charges or obligations shall, upon notice by Landlord to Tenant, be added, effective as of the date of the increase under the Master Lease, to the Fixed Minimum

Rent previously payable by Tenant under this Lease **[use with Alternative Rent provision #1 - . . . , plus, in the case of an increase in rent payable under the Master Lease, an additional 5% of such increase]**; provided, however, that the Rent payable by Tenant under this Lease shall not be reduced in the event of a decrease in the rent or other charges or obligations of Landlord as lessee under the Master Lease. Except as expressly provided herein, if Landlord enters into a new Master Lease, whether or not there was previously a Master Lease in place, then Fixed Minimum Rent payable under this Lease shall be increased in the amount equal to the difference between the Fixed Minimum Rent previously payable under this Lease and the amount of rent payable under the new Master Lease; provided, however, that the Rent payable by Tenant under this Lease shall not be reduced in the event of a decrease in the rent or other charges or obligations of Landlord as lessee under any new Master Lease. In the event that the Premises described herein encompass less than the property demised to Landlord under the terms of the Master Lease, Tenant shall only be responsible for its prorata share of the real estate taxes, assessments, insurance premiums and other charges assessed to or levied against the property demised pursuant to the Master Lease and a like percentage of any increase in the rent or other charges or obligations of Landlord as lessee under the Master Lease.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 35

According to the Rent Addendum for Jack In The Box, what happens if there is a conflict between the provisions of the Addendum and the terms of the Lease Agreement?

Accepted Answer

- 21. To the extent this Amendment shall be deemed to be inconsistent with any terms or conditions of the Agreement, the terms of this Amendment shall govern.

DIFFERENT RULES, LLC DEVELOPER
#### **EXHIBIT Q**

#### **LEASE ADDENDUM**

## **LEASE ADDENDUM (AS REQUIRED BY THE JACK IN THE BOX FRANCHISE AGREEMENT)**

Source: Item 22 — CONTRACTS (FDD page 94)

Question 36

What actions would franchisees be required to take if Jack In The Box begins using a public figure?

Accepted Answer

The Company develops and executes marketing programs and activities for the *Jack in the Box* brand and directs, prepares and/or places advertising, promotions and/or communications to build the brand. The marketing programs and activities may include, but are not limited to: preparing and conducting digital, social, television, radio, and out-of-home advertising campaigns; purchasing radio, television, digital, social, and other media for the distribution of advertising campaigns; advertising through direct mail and outdoor billboards; preparing and conducting marketing/brand surveys and research, which may include awareness and usage surveys, focus groups, marketing surveys and consumer feedback surveys; public relations activities; research, development and testing of products, packaging, and concepts; brand positioning and marketing activation; preparing, conducting, providing for first party and/or third party delivery promotions, discounts, coupons, deals; preparing and executing e-mail and internet-based marketing programs; employing advertising, public relations, and branding agencies and other professional consultants; and providing point-of-purchase, collateral and other marketing materials to the restaurants operated under the System.

Source: Item 18 — PUBLIC FIGURES (FDD page 81)

Question 37

How does Article 33, Section 687.5 of the New York General Business Law supplement Section 11.D, "Non-assignability," of the Jack In The Box agreement?

Accepted Answer

tion of the requirements of the New York General Business Law, Article 33, Sections 680 through 695, and of the regulations promulgated thereunder (N.Y. Comp. Code R. & Regs., tit. 13, §§ 200.1 through 201.16), the parties to the attached JACK IN THE BOX DEVELOPMENT AGREEMENT (the " Agreement") agree as follows:

- 1. Section 11.D of the Agreement, "Non-assignability," is supplemented by the following:
  - Article 33, Section 687.5, of the New York General Business Law states that it is unlawful to require a franchisee to assent to a release, assignment, novation, waiver or estoppel which would relieve a person from any duty or liability imposed by this article.
- 2. Section 24 of the Agreement, under the heading "Miscellaneous," is supplemented by adding the following language:

Nothing in this Agreement should be considered a waiver of any right conferred upon Franchisee by New York General Business Law, Sections 680-695.

- 3. There are circumstances in which an offering made by DIFFERENT RULES, LLC would not fall within the scope of the New York General Business Law, Article 33, such as when the offer and acceptance occurred outside the state of New York. However, an offer or sale is deemed made in New York if Developer is domiciled in or the franchise will be opening in New York.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 38

Besides the initial fees, what additional charges might a Jack In The Box franchisee incur for taxes and freight?

Accepted Answer

| Description of Charge* | Fee | Type of Charge | Contract | Comments |
|---|---|---|---|---|
| POS Software license fee | $1,000 | per site | Franchise Agreement | One-time software license fee. We are working on the roll out of new POS software which will not have this one-time fee; instead, you will pay to the vendor a monthly subscription fee of $280 to $369 depending on a variety of circumstances. |
| Taxes/Freight | Actual amounts charged by carrier. | per equipment/ services | As specified in each contract. | Taxes may apply on any of the above-related fees, as required by taxing authorities, and are in addition to the fees stated. |

Source: Item 5 — INITIAL FEES (FDD pages 22–27)

Question 39

What are the circumstances under which Jack In The Box franchisees may be required to obtain a guaranty from a related or unrelated third party?

Accepted Answer

s, but be aware that not all such franchisees will be able to communicate with you.

## **ITEM 21 FINANCIAL STATEMENTS**

Attached hereto as Exhibit A are the audited consolidated financial statements of our parent company, Jack in the Box SPV Guarantor, LLC and subsidiaries ("SPV"), as

of September 29, 2024 and October 1, 2023, the related consolidated statements of earnings, member's deficit, and cash flows for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, and the unaudited consolidated statements as of January 19, 2025. Under the Guaranty of Performance (included in Exhibit A), SPV has absolutely and unconditionally guaranteed our duties and obligations under the Franchise Agreement.

Also included are the audited consolidated balance sheets of our indirect parent company, Jack in the Box Inc. and subsidiaries as of September 29, 2024 and October 1, 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders' deficit for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022. These financials are being included for disclosure purposes only. As reflected in Item 1, Jack in the Box, Inc. is our Manager, performing certain services on our behalf. Jack in the Box, Inc. is not a party to the Franchise Agreement, Nontraditional License Agreement, or Development Agreements we sign with franchisees, nor does it guarantee any of our obligations.

## **EXHIBIT A**

#### **FINANCIAL STATEMENTS**

# Jack in the Box SPV Guarantor, LLC and Subsidiaries

Consolidated Financial Statements As of September 29, 2024 and October 1, 2023 (With Independent Auditors' Report Thereon)

## Jack in the Box SPV Guarantor, LLC and Subsidiaries

#### TABLE OF CONTENTS

| Independent Auditors' Report                   | 1    |
|------------------------------------------------|------|
| Consolidated Balance Sheets                    | 3    |
| Consolidated Statements of Earnings            | 4    |
| Consolidated Statements of Member's Deficit    | 5    |
| Consolidated Statements of Cash Flows          | 6    |
| Notes to the Consolidated Financial Statements | 7    |

![](_page_98_Picture_0.jpeg)

KPMG LLP Suite 1100 4655 Executive Drive San Diego, CA 92121-3132

#### **Independent Auditors' Report**

The Board of Managers Jack in the Box SPV Guarantor, LLC:

#### *Opinion*

We have audited the consolidated financial statements of Jack in the Box SPV Guarantor, LLC and its subsidiaries (the Company), which comprise the consolidated balance sheets as of September 29, 2024 and October 1, 2023, and the related consolidated statements of earnings, member's

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 40

What conditions must be met for the heirs or personal representative to transfer the interest of a deceased Jack In The Box Developer, Operator, or Owner?

Accepted Answer

In the event of the death or incapacity of Franchisee or an Owner, the interest of such Owner or Franchisee may be transferred to the Owner or Franchisee's heirs or personal representative if:

- A. Such person is deemed in Company's sole discretion to fulfill its requirements relating to financial condition, character, and managerial qualifications and commitment for franchisees, as in effect at the time of transfer; and to meet any other requirements that Company shall then be generally applying; and
- B. Such person agrees in writing to assume full and unconditional liability for and to perform all the terms and conditions of this Agreement to the same extent as the original Franchisee or Owner.

If such person is not so approved, the Franchisee's or Owner's personal representative shall use its best efforts to sell the Franchised Restaurant (or the interest therein) to a person acceptable to Company within twelve (12) months, subject to the Right of First Refusal set forth in the following Section. During such period, Company shall have the option but not the obligation to operate and/or manage the Franchised Restaurant on Franchisee's (or his estate's) behalf until the interest is transferred to a person acceptable to Company. Company will make a complete accounting, and shall

forward the net income from the operation to Franchisee's or Owner's estate, less Company's expenses and a reasonable management fee, if it elects to operate and/or manage the restaurant. If the interest of the Franchisee or such Owner is not conveyed to a party acceptable to Company within a twelve (12) month period from the date of death or incapacity of such person, Company shall have the option but not the obligation to purchase such person's interest at fair market value, by giving notice of Company's intent to purchase within thirty (30) days of the end of such twelve (12) month period.

If, at the end of that time period, the interest of a deceased or incapacitated Franchisee or Owner has not been conveyed to a party acceptable to Company, and Company has not exercised its option to purchase such person's interest at fair market value, Company may immediately terminate this Agreement, which termination shall be effective upon receipt of notice thereof by Franchisee's or Owner's personal representative.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 41

What constitutes a 'Force Majeure' event that could delay the opening of a Jack In The Box Developed Restaurant, and what is the maximum delay allowed due to such an event while still being considered in compliance with the agreement?

Accepted Answer

B. If any opening is delayed because of "Force Majeure" (as defined below), then for the period of the delay in opening, up to a maximum of six (6) months following the applicable Compliance Date, the Developed Restaurant shall be deemed "open and in operation" for purposes of determining compliance with this Agreement. For the purposes of this Agreement, "Force Majeure" shall mean only acts of God, strikes, embargoes, war or riot.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 42

In the context of the Rhode Island Development Agreement Amendment for Jack In The Box, what happens if the amendment is inconsistent with the original agreement?

Accepted Answer

- 2. To the extent this Amendment is deemed to be inconsistent with any terms or conditions of the Agreement, the terms of this Amendment shall govern.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 43

What determines the minimum rent for a Jack In The Box restaurant location if the franchisee leases the location from Jack In The Box?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| De-identification Costs | Any costs incurred to de- identify the premises | Upon Demand | If you fail to de-identify the premises after termination or expiration and we make nonstructural changes, you must reimburse us for the costs. |
| Type of Expenditure | Estimated Amount or Estimated Low -High Range |  | Method of Payment |
| Initial franchise fee2 | $50,000 | $50,000 | Lump sum |
| Fee for trade | $0 | $7,500 | Lump sum |
| area survey |  | (plus all |  |
| analysis3 |  | expenses) |  |
| Land4 | Not included | Not included | Not included |
| Fee for architect/ | $44,000 | $216,000 | As agreed |
| engineering |  |  |  |
| services5 |  |  |  |
| Environmental | $2,500 | $34,000 | As agreed |
| assessment5, 6 |  |  |  |
| On-site | $337,000 | $825,000 | As agreed |
| improvements7 |  |  |  |
| Type of Fee | Amount | Due Date | Remarks determining minimum rent is the greater of: (i) underlying rent under the master lease for the restaurant location; or (ii) 9.5% of 90% of trailing 52-week sales at the restaurant. The typical percentage rent is 9.5% of Gross Sales. For new restaurant openings in which you lease the restaurant location from us, minimum rent is determined based upon the terms set forth in the applicable Development Agreement (currently 105% of underlying master lease rent). In certain circumstances, the percentage rent may be lower.

Source: Item 6 — OTHER FEES (FDD pages 27–35)

Question 44

In the event of inconsistencies between the Jack In The Box Disclosure Document and the Rhode Island Disclosure Addendum, which terms govern?

Accepted Answer

In recognition of the requirements of the Rhode Island Franchise Investment Act, §§ 19 28.1-1 through 19-28.1-34 the JACK IN THE BOX DISCLOSURE DOCUMENT for use in the State of Rhode Island is amended to include the following:

- 1. The following language is added to Item 17, "Renewal, Termination, Transfer and Dispute Resolution":
  - § 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."
- 2. To the extent this Addendum is deemed to be inconsistent with the Disclosure Document, the terms of this Addendum shall govern.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 45

In the event of an inconsistency between the Jack In The Box franchise agreement and the North Dakota amendment, which terms will govern?

Accepted Answer

- 4. To the extent this Amendment is deemed to be inconsistent with any terms or conditions of the Agreement, the terms of this Amendment shall govern.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 46

To what extent is a Jack In The Box franchisee obligated to indemnify the franchisor for losses or liabilities in Washington?

Accepted Answer

- 10. Any provision in the franchise agreement or related agreements requiring the franchisee to indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 47

Does the Jack In The Box FDD state that there may be states in addition to those listed in Exhibit C in which they have appointed an agent for service of process?

Accepted Answer

We intend to register this disclosure document as a "franchise" in some or all of the following states, if required by the applicable state law. If and when we pursue franchise registration (or otherwise comply with the franchise investment laws) in these states, we will designate the following state offices or officials as our agents for service of process in these states. There may be states in addition to those listed below in which we have appointed an agent for service of process. There may also be additional agents in some of the states listed.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 48

For the Jack In The Box financial performance data, what closure durations are acceptable for restaurants included in the tables?

Accepted Answer

The Restaurants included in the tables below were open for the twelve-month periods ending September 30, 2023 and September 30, 2024. No included Restaurant was closed for more than 5 days during those periods (except for (i) closures for standard holiday hours, and (ii) extraordinary weather events lasting no more than ten (10) calendar days). The Restaurants were operated by the same franchisee(s) for both of those periods.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 81–87)

Question 49

For a Jack In The Box franchise in a build-to-suit scenario, if there is a conflict between the Rent Addendum and the Lease Agreement, which document's provisions will control?

Accepted Answer

DIFFERENT RULES, LLC DEVELOPER
#### **EXHIBIT Q**

#### **LEASE ADDENDUM**

## **LEASE ADDENDUM (AS REQUIRED BY THE JACK IN THE BOX FRANCHISE AGREEMENT)**

Source: Item 22 — CONTRACTS (FDD page 94)

Question 50

For a Jack In The Box franchise in Illinois, when is the Development Fee payable according to the Illinois Development Agreement Amendment?

Accepted Answer

1. The following is added to the end of Section 5 of the Agreement:

Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition. Upon the opening of the first Franchised Restaurant, Developer shall pay to Company the Development Fee.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 51

For a Jack In The Box franchise, what is the minimum rent payable under the Franchise Lease, and how is it calculated in relation to the Underlying Lease?

Accepted Answer

| 4. In any event, whether or not Developer acquires Site No and                               |
|-------------------------------------------------------------------------------------------------|
| develops a Jack in the Box restaurant thereon, Developer shall reimburse Company for            |
| any and all costs and expenses, including, without limitation, any and all taxes or             |
| assessments related thereto and any internal overhead or other charges, incurred by             |
| Company in connection with the acquisition, investigation and development of Site No.           |
| , and Developer shall also be responsible for all subsequent costs and expenses in              |
| connection with the acquisition, investigation and development of Site No,                      |
| including, without limitation, any deposits, reimbursements, or other payments due the          |
| Master Lessor pursuant to the Underlying Lease. In addition to any and all                      |
| out of pocket costs and other expenses, and any internal overhead or other charges,             |
| incurred by Company in connection with the acquisition, investigation and development           |
| of Site No, Developer agrees that it shall also pay Company the additional sum of               |
| \$25,000.00 to compensate Company for services rendered in connection with the                  |
| development of Site No ("Due Diligence Fee"). Company shall provide Developer                   |
| with one or more invoices for any and all unreimbursed costs and expenses incurred by           |
| Company in connection with the acquisition, investigation and development of Site No.           |
| , and Developer shall reimburse Company for such costs within thirty (30) days of               |
| its receipt of such invoice(s); provided, however, that the Due Diligence Fee shall be          |
| due and payable by Developer to Company concurrently with execution and delivery of             |
| this Agreement. Developer shall be responsible for all such reimbursements, costs and           |
| expenses, even if Developer ultimately does not develop Site No                                 |
|                                                                                                 |
| 5. |
| As required pursuant to the Agreement, Developer must obtain Site Approval |
| (including, without limitation, satisfaction of all conditions thereto), Expansion Approval     |
| and Lease Approval, if applicable, with respect to Site No Developer shall comply               |
| in all respects with all Site Approval and development requirements established from            |
| time to time by Company, including, without limitation, those set forth in the Agreement.       |
| 6. |
| Developer |
| will |
| construct |
| all |
| necessary |
| improvements |
| and |
| commence |
| business operations at Site No as soon as possible following waiver of the                      |
| contingencies under the Underlying Lease, but in any event on or before the                     |
| Compliance |
| Date. |
| Immediately |
| upon |
| completion |
| of |
| construction |
| of |
| the |
|  |
| Improvements by Developer, or earlier as may be required by either party, Company               |
| and Developer shall execute a then current form of Franchise Agreement and Franchise            |
| Lease for Site No, which will be effective upon the "Term Commencement Date"                    |
| of the Underlying Lease (as defined therein), whether or not Developer has                      |
| opened for business at Site No, and shall have a term of twenty (20) years. In                  |
| accordance |
| with |
| the |
| provisions |
| of |
| the |
|  |
| Underlying |
| Lease, |
| the |
| Term |
| Commencement Date shall be [For example: the earlier of (i) one                                 |
| hundred eighty one (181) days after the last of the contingencies to which the                  |
| Underlying Lease is subject have been satisfied or waived by Company, or (ii) the date          |
| FDD 05/25 |
| F-3 |
| Exhibit G-2 – Multi-Unit Development Agreement |

| upon which the restaurant opens for business]. rent payable under the Franchise Lease shall be equal to (a) 105% of the minimum rent payable by Company to the Master Lessor pursuant to the Underlying Lease, plus (b) any percentage rent payable under the Underlying Lease (estimated), which Developer acknowledges shall be equal to (as such terms are defined in the Underlying Lease). franchise documents, Developer will pay the franchise fee of \$50,000.00, as outlined in the Franchise Agreement, and shall otherwise comply in all respects with the obligations set forth therein. The franchise, royalty and marketing fees will be charged as set forth in the Franchise Agreement.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 52

For a Jack In The Box franchise in Virginia, when is the development fee due according to the Virginia Disclosure Addendum?

Accepted Answer

In recognition of the requirements of the Virginia Retail Franchising Act, Virginia Code sections 13, 1-557 et seq., the attached JACK IN THE BOX DEVELOPMENT AGREEMENT (the "Agreement") is supplemented as follows:

1.  The following is added to the end of Section 5 of the Agreement:

Notwithstanding the foregoing, Company will defer payment of the Development Fee until the first Restaurant that you develop under this Agreement opens for business. Upon the opening of the first Restaurant, Developer shall pay to Company the Development Fee.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 53

When is a Jack In The Box franchisee required to pay for a Food Safety Reassessment?

Accepted Answer

| Type of Fee                                               | Amount                                                                                                                                               | Due Date                                                                                     | Remarks                                                                                                                                                                                                                                                                                                                    |
|-----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  |  | supporting records or other information required by the franchise agreement. The cost of an audit includes charges for independent accountants, outside attorneys' fees, and travel costs and a reasonable per-diem charge for employees of the Company. |
| Food Safety Reassessment | Cost of inspection | Upon demand | Payable only if you have failed a food safety assessment. The cost of

Source: Item 6 — OTHER FEES (FDD pages 27–35)

Question 54

Would franchisees be prohibited from using their own public figure endorsements if Jack In The Box uses one?

Accepted Answer

Franchisee is not permitted to establish any online presence including websites, social media venues, or domain names that incorporate the JACK IN THE BOX marks, name, initials or indicia. Franchisee is not permitted to establish any online presence including websites, social media venues, or domain names linking to the JACK IN THE BOX site without the prior written permission of Company.

All local store marketing must be approved by Company prior to use.

Source: Item 18 — PUBLIC FIGURES (FDD page 81)

Question 55

For Jack In The Box franchises in Illinois, when is the payment of the initial franchise/development fees due?

Accepted Answer

Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition. Upon the opening of the first Franchised Restaurant, Developer shall pay to Company the Development Fee.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 56

For Jack In The Box franchises in Maryland, when is the Development Fee due?

Accepted Answer

In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the parties to the JACK IN THE BOX DEVELOPMENT AGREEMENT (the "Agreement") agree as follows:

1. The following is added to the end of Section 5 of the Agreement:

Notwithstanding the foregoing, in the State of Maryland, Company will defer the payment of the Development Fee until the first Franchised Restaurant that Developer develops under this Agreement opens for business. Upon the opening of the Franchised Restaurant, Developer shall pay to JIB the Development Fee.

Source: Item 22 — CONTRACTS (FDD page 94)

Question 57

What happens if Jack In The Box's estimated or pro forma income statement includes a statement that the historical results may not be indicative of future results?

Accepted Answer

The unaudited pro forma financial information as presented above is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2021, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the two brands.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 58

What happens if Jack In The Box fails to prepare audited financial statements?

Accepted Answer

s, but be aware that not all such franchisees will be able to communicate with you.

## **ITEM 21 FINANCIAL STATEMENTS**

Attached hereto as Exhibit A are the audited consolidated financial statements of our parent company, Jack in the Box SPV Guarantor, LLC and subsidiaries ("SPV"), as

of September 29, 2024 and October 1, 2023, the related consolidated statements of earnings, member's deficit, and cash flows for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, and the unaudited consolidated statements as of January 19, 2025. Under the Guaranty of Performance (included in Exhibit A), SPV has absolutely and unconditionally guaranteed our duties and obligations under the Franchise Agreement.

Also included are the audited consolidated balance sheets of our indirect parent company, Jack in the Box Inc.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 59

What happens if Jack In The Box's goodwill impairment testing indicates that the carrying amount of a reporting unit exceeds its fair value?

Accepted Answer

Our non-financial instruments, which primarily consist of property and equipment, operating lease right-of-use assets, goodwill, and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on an annual basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values are written down to fair value.

In connection with our impairment reviews performed during 2024, the Company impaired certain assets. For further information, see Note 4, *Summary of Refranchisings and Assets Held For Sale*, Note 5, *Goodwill and Intangible Assets*, *Net*, and Note 9, *Other Operating Expenses*, *Net* in the notes to the consolidated financial statements.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)

Question 60

If Jack In The Box begins using a public figure, will there be a deadline for franchisees to implement related changes?

Accepted Answer

Franchisee is required to participate in tests of new products, equipment, services and procedures at the Franchised Restaurant, including but not limited to testing of significant cooking, operating systems and platforms and new menu items, equipment.

Company may require Franchisee to use specific product pricing during the test period.

Reimbursement of certain documented out of pocket costs necessarily incurred by Franchisee as part of the test may be addressed by separate agreement. Franchisee is responsible for any soft costs associated with testing, such as wages payable during training.

Source: Item 18 — PUBLIC FIGURES (FDD page 81)

Question 61

If building or remodeling a restaurant, will Jack In The Box give access to current designs, standards, and specifications?

Accepted Answer

The Company has standards and specifications relating to the building design for *Jack in the Box* restaurants. You do not need to purchase design or construction services from us or a Company-approved supplier, other than brand-specific items as

discussed below; however, we do require that your contractors, consultants, vendors, and suppliers be properly licensed, that your architect(s) be on-boarded by us and be approved by us (at our sole discretion) to be able to access the project management system as needed for the exchange of plans, specifications, and other resources, and that they follow processes in place for the review, editing, and approval of all designs and construction documents. The designs, standards and specifications of the prototypical buildings are created and maintained by the Company, and we may modify them from time to time. If you are building or remodeling a restaurant, the Company will give you and your architect access to the current designs, standards, and specifications for the various aspects and components of a prototypical *Jack in the Box* restaurant.

We are currently implementing a reimage program which offers incentives to certain existing franchisees for remodeling their existing restaurants and requires the use JIB-approved architects for properties owned by JIB Properties. Details for the reimage program will be released to impacted existing franchisees.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 41–46)

Question 62

If the Commencement Date for a Jack In The Box lease falls on a day other than the first day of the month, what payment is required from the tenant and when is it due?

Accepted Answer

Fixed Minimum Rent for any partial month during the term of this Lease shall be appropriately prorated. If the Commencement Date shall fall on a day other than the first day of a calendar month, then Tenant shall pay to Landlord, on or before the Commencement Date, a prorated portion of the Fixed Minimum Rent.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 63

If the Company chooses one of its options after a Jack In The Box developer fails to develop Site No, is the developer still obligated to comply with the schedule in Exhibit A of the Agreement?

Accepted Answer

## **16. DEFAULT; REMEDIES**.

- A. Time is of the essence with respect to all of Developer's obligations under this Agreement. Except as otherwise provided by law, developer shall be in default under this Agreement if Developer breaches or otherwise fails to perform any of its obligations under this Agreement, including, without limitation, items (1) through (8) set forth below, and fails to cure such breach or failure within the period specified below, and if no time is specified, then within thirty (30) days after receipt of written notice. Without prejudice to any other rights or remedies that Company may have under this Agreement, at law or in equity, in the event Developer defaults, then Company shall have the right to immediately terminate this Agreement and all development rights granted hereunder, in which event Company shall have the unrestricted right to operate or license persons or entities other than Developer to develop and to operate one or more *Jack in the Box* restaurants within the Development Area. Company shall retain the Development Fee.
- (1) Developer fails to open the Developed Restaurants on or before the Compliance Dates.
- (2) Developer fails to obtain Expansion Approval, Site Approval or Lease Approval before the commencement of construction of any Developed Restaurants.

- (3) Without Company's prior written consent, Developer assigns, transfers or otherwise disposes of, or attempts to assign, transfer, encumber, or otherwise dispose of this Agreement in whole or in part.

- (4) Developer's commencing a voluntary case or otherwise seeking any type of relief under the federal bankruptcy laws, as now or hereafter constituted, or under any state insolvency or similar law, or the entry of a decree or order for relief in respect of Developer by a court having jurisdiction in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or under any state insolvency or similar law; all without dismissal within ninety (90) days from filing.

This Agreement shall terminate upon this occurrence without notification to Developer as if that date were the expiration date, and Developer expressly waives all rights under the provisions of the Bankruptcy Rules and consents to the immediate termination of this Agreement.

Developer agrees not to seek an Injunctive Order from any court in any jurisdiction relating to insolvency, reorganization or arrangement proceedings which would have the effect of staying or enjoining this provision.

Source: Item 23 — RECEIPT (FDD pages 94–634)

Question 64

If Jack In The Box decides to use a public figure, how will the costs be allocated between the franchisor and franchisees?

Accepted Answer

adership Advisory Council ("LAC").

There are no advertising cooperatives.

Marketing programs and activities are paid for from the Marketing Fund (as that term is defined in the Franchise Agreement). The Marketing Fund is a combination of (a) the marketing fees paid by United States franchisees (in an amount equal to the percentage paid by all traditional *Jack in the Box* restaurants in the system, which is currently five percent (5%) for traditional locations), and (b) an amount contributed by the Company of no less than five percent (5%) of the Gross Sales of its traditional Company-owned and -operated *Jack in the Box* restaurants. (See Exhibit F-1, Franchise Agreement, Section 8.B.) In addition to restaurant contributions, we occasionally receive money from vendors in support of marketing campaigns, but the sum collected from these vendors varies. All vendor receipts are recorded in a separate account within the Marketing Fund.

The Marketing Fund is administered by the Company, and is not audited. The LAC has the right to request quarterly reports relating to the Marketing Fund.

If Marketing Fund contributions are not spent during the year contributed, or overspending occurs, the surplus or deficit is carried over to the following year. With the exception of very limited shared overhead expenses, none of the Marketing Fund is used to solicit new franchise sales.

During the 2024 fiscal year, contributions to the Marketing Fund were spent as follows (in approximate percentages): 65.43% on media, promotions and sponsorships, 11% on agency fees, 8.2% on production, 6.34% on administrative expenses, and 9.03% on other expenses. The "other expenses" include, among others, merchandising, consumer research, menu development, loyalty program, data processing. The Marketing Fund ended fiscal year 2024 with a surplus of 0.3% of the funds con

Source: Item 18 — PUBLIC FIGURES (FDD page 81)

Jack_In_The_Box 2025 FDD FAQ