Does the Jack In The Box FDD provide any explanation for why a Jack In The Box franchise agreement might be terminated?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Restaurant on or before the Compliance Date.
- (2) Developer fails to obtain Site Approval or Lease Approval before the commencement of construction of the Developed Restaurant.
- (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.
Source: Item 23 — RECEIPT (FDD pages 94–634)
What This Means (2025 FDD)
According to the 2025 Jack In The Box FDD, there are several reasons why a Jack In The Box franchise agreement could be terminated. One reason is if the Developer fails to open the Developed Restaurant on or before the Compliance Date. Another reason for termination is if the Developer fails to obtain Site Approval or Lease Approval before starting construction on the restaurant.
Additionally, the agreement can be terminated if the Developer attempts to transfer or dispose of the agreement without prior written consent from Jack In The Box. Furthermore, if the Developer seeks relief under federal bankruptcy laws or any state insolvency law, or if a court enters an order for relief against the Developer under such laws, and the situation is not dismissed within ninety days, the agreement may be terminated.
The FDD also states that a Jack In The Box franchise agreement can be terminated if the Developer fails to obtain or renew necessary licenses or permits, fails to comply with the terms of the agreement or any related Franchise Agreements, or if any other Jack In The Box Franchise Agreements under which the Developer is an Owner or Operator are terminated. Finally, the agreement can be terminated if the Developer is delinquent by more than sixty days in payments owed to Jack In The Box under any agreement.