For Jack In The Box franchises 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 standard policy for Development Fee payments is modified for franchises in Maryland. Instead of paying the Development Fee upfront, Maryland franchisees are allowed to defer payment.
For both single-unit and multi-unit development agreements in Maryland, the Development Fee is not due until the first Jack In The Box restaurant opens for business. Once that initial restaurant is open, the franchisee is then obligated to pay the Development Fee to Jack In The Box. This deferral is mandated by the Maryland Franchise Registration and Disclosure Law.
This arrangement benefits prospective Jack In The Box franchisees in Maryland by reducing the initial financial burden. Instead of paying the Development Fee before any operations begin, franchisees can use those funds for startup costs and only pay the fee once the restaurant is generating revenue. This can significantly improve cash flow during the critical early stages of the business.