Does Jack In The Box have any limits on their right to assign the Development Agreement contract?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| g. | "Cause" defined - defaults which can be cured | § 16 (Single Unit) § 16 (Multi-Unit) | Default under Development Schedule, failure to obtain expansion approval or site approval before beginning site development, assignment without consent, involuntary bankruptcy filing, failure to obtain permits, breach of a franchise agreement or other agreement with the Company. |
| h. | "Cause" defined - defaults which cannot be cured | § 16 (Single Unit) § 16 (Multi-Unit) | Voluntary bankruptcy and other insolvency. |
| i. | Your obligations on termination/nonrenewal | § 16 (Single Unit) § 16 (Multi-Unit) | Cease establishing restaurants, cease operating any restaurant for which a Franchise Agreement has not been executed, payment of amounts due, compliance with covenants. |
| j. | Assignment of contract by the Company | § 11.E (Single Unit) § 11.E (Multi Unit) | There are no limits on our assignment rights. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 70–81)
What This Means (2025 FDD)
According to Jack In The Box's 2025 Franchise Disclosure Document, there are no limits on the company's right to assign the Development Agreement contract. The FDD states clearly that Jack In The Box faces no restrictions regarding assignment rights. This is a standard clause in many franchise agreements, allowing the franchisor flexibility in corporate restructuring, mergers, acquisitions, or other business transactions.
For a prospective franchisee, this means that the Development Agreement could be transferred to another entity without their consent or input. The new entity would then assume the rights and responsibilities of the franchisor. While this might not directly impact the day-to-day operations of a Jack In The Box restaurant, it could potentially affect the long-term relationship and support provided by the franchisor.
It is important for a potential Jack In The Box franchisee to understand this clause and consider its implications. While the franchisor has the right to assign the agreement, the franchisee should ensure that the core obligations and support structures outlined in the agreement remain intact regardless of any assignment. This should be a point of discussion during the due diligence process to fully understand the potential impact on the franchisee's investment and operations.