For Jack In The Box, what interest rate will be applied to late payments from Licensees?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
Any payment due from Licensee to Company that is not paid when due shall accrue interest from the date such amount was due, until paid, at the then-current rate established by Company for Licensees, or the maximum rate permitted by law, whichever is less.
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.
Any and all Rent hereunder and other sums that may be and become due and owing from Tenant to Landlord hereunder shall bear interest from the respective due dates thereof at the highest rate of interest permitted by law in the state in which the Premises are located, and if there is no maximum rate permitted by law, then at a per annum rate which is the higher of (a) twenty percent (20%) or (b) the prime commercial interest rate announced from time to time by Bank of America, N.T.& S.A., plus two percent (2%). The interest rate specified in this Section 3E is referred to hereinafter as the "Default Interest Rate."
Source: Item 23 — RECEIPT (FDD pages 94–634)
What This Means (2025 FDD)
According to the 2025 Jack In The Box Franchise Disclosure Document, any payment due from a Licensee that is not paid when due will accrue interest from the date the amount was due until it is paid. The interest rate applied will be the then-current rate established by Jack In The Box for Licensees or the maximum rate permitted by law, whichever is less.
Similarly, if any payment to Jack In The Box required under the Franchise Agreement is not paid by its due date, the Franchisee agrees to pay interest at the then-current rate established by Jack In The Box under its Franchise Payment Policy, or the maximum rate permitted by law, whichever is less. In addition to interest on late payments, the Franchisee is obligated to pay any collection and legal expenses, including attorneys' fees, necessary to obtain full payment of the invoice amount if they do not pay the invoice by the due date.
For rent and other sums due to Jack In The Box Properties, LLC as Landlord, these amounts will bear interest from their due dates at the highest rate permitted by law in the state where the premises are located. If there is no maximum rate permitted by law, the annual interest rate will be the higher of either 20% or the prime commercial interest rate announced by Bank of America, N.T.& S.A., plus 2%. This rate is referred to as the "Default Interest Rate."
Prospective franchisees should be aware of these interest rate terms and ensure they understand the specific interest rates that Jack In The Box establishes for late payments under both the License Agreement and the Lease Agreement. Franchisees should also be prepared to cover potential collection and legal expenses associated with late payments.