For a Jack In The Box Illinois Development Agreement, when is the Development Fee due?

According to the 2025 Jack In The Box Franchise Disclosure Document, specifically the Illinois Development Agreement Amendment, the payment of the Development Fee is deferred under certain conditions. The amendment states that the payment is deferred until Jack In The Box has met its initial obligations to the franchisee and the franchisee has commenced business operations. This requirement was mandated by the Office of the Illinois Attorney General due to Jack In The Box's financial condition.

In practical terms, this means a prospective Jack In The Box franchisee in Illinois will not be required to pay the Development Fee upfront. Instead, the fee becomes due only after Jack In The Box has fulfilled its initial obligations, and the franchisee has started operating their restaurant. This provides a level of financial assurance to the franchisee, as they are not paying the fee until the project is underway and they are ready to start doing business.

Furthermore, the Illinois Development Agreement Amendment clarifies that upon the opening of the first franchised restaurant, the developer is obligated to pay the Development Fee to Jack In The Box. This condition sets a clear trigger for when the deferred fee becomes payable, linking it directly to the commencement of restaurant operations. This arrangement potentially reduces the initial financial burden on the franchisee and aligns the payment with the start of revenue generation.

This deferral of payment is a notable deviation from standard franchising practices, where initial fees are typically required upfront. The amendment reflects a specific regulatory intervention in Illinois, aimed at protecting franchisees given Jack In The Box's financial circumstances. Prospective franchisees should carefully review the full Development Agreement and Amendment to understand all obligations and conditions related to this deferred payment structure.