For a Jack In The Box franchisee, what is the principal sum of the Promissory Note?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
year of the term of the Franchise Agreement, Developer will pay a reduced Royalty equal to 4% of Gross Sales; and (v) beginning with the first day of the fifth (5th) year of the term of the Franchise Agreement, and continuing throughout the remainder of the term thereof, Developer will pay a Royalty equal to 5% of Gross Sales. No Royalty reduction or other incentive listed above will be applicable to any restaurant which is not opened on a timely basis, and otherwise in full compliance with the terms of this Agreement. If prior to the end of YEAR 5 for any restaurant, the Agreement is terminated due to noncompliance, Developer agrees that the Royalty payable under all franchise agreements signed for restaurants developed under the Agreement shall revert automatically and without notice, to the standard Royalty which is 5% of Gross Sales.
OPTION B: If t
Source: Item 23 — RECEIPT (FDD pages 94–634)
What This Means (2025 FDD)
According to Jack In The Box's 2025 Franchise Disclosure Document, under certain conditions, the company or one of its affiliates will provide an interest-free loan to the developer. This loan is formalized through a promissory note.
The principal amount of this note is $150,000. The note outlines that the repayment will be made through a credit equivalent to 100% of the royalties that would typically be due based on the Gross Sales of the developed restaurant. This repayment method continues until the note is fully paid off.
Furthermore, the agreement specifies that the entire remaining principal balance of the note becomes due and payable if the developed restaurant is sold or closed. This condition ensures that Jack In The Box recovers the outstanding loan amount in the event of a change in ownership or cessation of operations.