What conditions must be met for Jack In The Box to approve a transfer of the Development Agreement?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| g. | “Cause” defined - defaults which can be cured | § 16 (Single Unit) § 16 (Multi-Unit) | Default under Development Schedule, failure to obtain expansion approval or site approval before beginning site development, assignment without consent, involuntary bankruptcy filing, failure to obtain permits, breach of a franchise agreement or other agreement with the Company. |
| h. | “Cause” defined - defaults which cannot be cured | § 16 (Single Unit) § 16 (Multi-Unit) | Voluntary bankruptcy and other insolvency. |
| i. | Your obligations on termination/nonrenewal | § 16 (Single Unit) § 16 (Multi-Unit) | Cease establishing restaurants, cease operating any restaurant for which a Franchise Agreement has not been executed, payment of amounts due, compliance with covenants. |
| j. | Assignment of contract by the Company | § 11.E (Single Unit) § 11.E (Multi- Unit) | There are no limits on our assignment rights. |
| k. | “Transfer” by you - defined | § 11 (Single Unit) § 11 (Multi-Unit) | Includes transfer of any interest in Development Agreement, Developer, or all or substantially all of the Developer’s business. |
| l. | The Company’s approval of transfer by you | § 11.B (Single Unit) § 11.B (Multi- Unit) | We have the right to approve transfers. |
| m. | Conditions for the Company’s approval of transfer | § 11.D (Single Unit) § 11.D (Multi- Unit) | No default, execution of new Development Agreement, a General Release of the Company, and any applicable personal guarantees, payment of tran |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 70–81)
What This Means (2025 FDD)
According to Jack In The Box's 2025 Franchise Disclosure Document, the company has the right to approve any transfer of the Development Agreement. If a franchisee seeks to transfer their Development Agreement, several conditions must be met to gain Jack In The Box's approval. These conditions are detailed in Section 11.D of both the Single Unit and Multi-Unit Development Agreements.
Specifically, the franchisee must not be in default of the agreement. Additionally, the franchisee must execute a new Development Agreement, provide a General Release of the Company along with any applicable personal guarantees, and pay a transfer fee. There may be other conditions that the franchisee needs to satisfy, as indicated by "and others; see § 8.D." The general release is subject to restrictions in applicable state law.
In summary, a Jack In The Box franchisee looking to transfer their Development Agreement needs to ensure they are in good standing with the company, prepared to sign new agreements and releases, and willing to cover any associated transfer fees. It is important to note that the specifics of these conditions can vary and are subject to applicable state laws, particularly concerning the general release.