For a Jack In The Box Development Agreement in Maryland, when is the Development Fee due?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
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:
- 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)
What This Means (2025 FDD)
According to the 2025 Jack In The Box FDD, the Development Fee for a Development Agreement in Maryland is deferred until the first franchised restaurant opens for business. Specifically, Jack In The Box will defer the payment of the Development Fee until the first Franchised Restaurant that the Developer develops under the agreement opens. Upon the opening of the Franchised Restaurant, the Developer is required to pay Jack In The Box the Development Fee.
This deferral is in place due to the requirements of the Maryland Franchise Registration and Disclosure Law. This means that a prospective franchisee in Maryland does not have to pay the development fee upfront, which can be a significant financial benefit. Instead, the franchisee can use those funds for other startup costs until the restaurant is generating revenue.
This arrangement provides a degree of financial flexibility for new Jack In The Box franchisees in Maryland, aligning the payment of the development fee with the commencement of business operations. It is important for prospective franchisees to carefully review the Maryland Development Agreement Amendment to fully understand their obligations and rights under Maryland law.