What is the condition for Jack In The Box to collect transfer fees in Washington?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
ny statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
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- 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 LICENSEE
WASHINGTON DEVELOPMENT AGREEMENT AMENDMENT (SINGLE UNIT)
In recognition of the requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.010 through 19.100.940 (the "Act"), the parties to the attached JACK IN THE BOX DEVELOPMENT AGREEMENT (the "Agreement") agree as follows:
- The following is added to the end of Section 5 of the Agreement:
Notwithstanding the foregoing, Company will defer the payment of the Development Fee. For each Restaurant that you develop under this Agreement, Developer shall pay to Company the pro-rated portion of the Development Fee attributable to that Restaurant after the Restaurant opens for business.
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- Developer may terminate the Development Agreement under any grounds permitted by state law.
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- In the event of a conflict of laws, the provisions of the Act will prevail.
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- Section 19.100.180 of the Act may supersede the Agreement in Developer's relationship with Company including the areas of termination and renewal of Developer's franchise. There may also be court decisions which may supersede the Agreement in Developer's relationship with Company including the areas of termination and renewal of Developer's franchise. Development agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
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- In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.
Source: Item 22 — CONTRACTS (FDD page 94)
What This Means (2025 FDD)
Based on the 2025 Jack In The Box Franchise Disclosure Document, the collection of development and franchise fees in Washington is subject to specific conditions under the Washington Franchise Investment Protection Act. For both single and multi-unit development agreements in Washington, Jack In The Box will defer the payment of the Development Fee. Instead of paying upfront, the developer pays a pro-rated portion of the Development Fee for each restaurant, but only after that specific restaurant opens for business.
Similarly, for License Agreements in Washington, Jack In The Box defers the payment of the Franchise Fee until the Licensed Restaurant actually opens. Upon the restaurant's opening, the licensee is then required to pay the Franchise Fee.
These deferral conditions are implemented to comply with the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.010 through 19.100.940. This arrangement potentially benefits franchisees by reducing their initial financial burden, aligning fee payments with the actual commencement of business operations, and mitigating risks associated with pre-opening investments. However, franchisees must still be prepared to pay these deferred fees promptly once their restaurants are operational.