For Jack In The Box franchisees, what happens if a payment is not made when due?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
If any payment to Franchisor required under this Agreement is not paid by its due date, Franchisee agrees to pay interest at the then-current rate established by Franchisor under its Franchise Payment Policy or the maximum rate permitted by law, whichever is less. Additionally, if Franchisee does not pay the invoice by the due date, Franchisee is obligated to pay any collection and legal expenses, including attorneys' fees, necessary to obtain full payment of the invoice amount. Franchisor's acceptance of any payment less than the full amount of any invoice will not constitute a waiver of Franchisor's right to collect the balance, and will not be deemed satisfaction of Franchisor's claim.
Source: Item 23 — RECEIPT (FDD pages 94–634)
What This Means (2025 FDD)
According to Jack In The Box's 2025 Franchise Disclosure Document, if a franchisee fails to make payments by the due date, they will incur additional financial obligations. Specifically, the franchisee must pay interest on the overdue amount. This interest will be calculated at the rate established by Jack In The Box under its Franchise Payment Policy or at the maximum rate permitted by law, whichever is lower.
In addition to interest, the franchisee is responsible for covering any collection and legal expenses that Jack In The Box incurs to recover the unpaid amount. These expenses include attorneys' fees. It's important to note that if Jack In The Box accepts a payment that is less than the full amount owed, this does not waive their right to pursue the remaining balance. The acceptance of partial payment does not satisfy the franchisee's full debt to Jack In The Box.
Furthermore, the FDD states that if a developer is delinquent in excess of sixty (60) days in the payment of any amount due under any Franchise Agreement with Company, or is otherwise in default under any other agreement, lease, promissory note or account with Company, it can result in the termination of the Development Agreement and the Development Rights. However, the termination of the Development Agreement and the Development Rights shall not release Developer from obligations to pay any sums owed under this Agreement or to pay any franchise fees, royalties or other sums owed to Company under Franchise Agreements or other agreements, leases, notes or accounts.