In Minnesota, when does a Jack In The Box developer have to pay the Development Fee?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
chise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed with the franchise.
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- To the extent this Amendment is deemed to be inconsistent with any terms or conditions of the Agreement, the terms of this Amendment shall govern.
DIFFERENT RULES, LLC DEVELOPER
MINNESOTA DEVELOPMENT AGREEMENT AMENDMENT (MULTI-UNIT)
In recognition of the requirements of the Minnesota Franchises Law, Minn. Stat. §§ 80C.01 through 80C.22, and of the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce, Minn. Rules §§ 2860.0100 through 2860.9930, the parties to the attached 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 Minnesota, Company will defer the payment of the Development Fee until the first Franchised Restaurant that Developer will develop under this Agreement opens for business. Upon the opening of the first Franchised Restaurant, Developer shall pay to Company the Development Fee.
- Section 11 of the Agreement, under the heading "Non-Assignability," is supplemented by the following:
The general release required as a condition of assignment or transfer shall not apply to any claims that arise under Minnesota Law regulating franchises. (Minn. Rule Part 260.4400D.)
- Section 16 of the Agreement, "Default; Remedies," is supplemented by the following sentence:
With respect to development rights governed by Minnesota Law, Company will comply with Minn. Stat. § 80C.14, Subds. 3, 4 and 5 which require, except in certain specified cases, that a Developer be given 90-day notice of termination (with 60 days to cure) and 180 days notice for non-renewal of the development agreement, and that consent to the transfer of the development rights not be unreasonably withheld.
- Section 24 of the Agreement, "Miscellaneous," is supplemented by the following:
Minn. Stat. § 80C.21 and Minn. Rule 2860.
Source: Item 22 — CONTRACTS (FDD page 94)
What This Means (2025 FDD)
According to Jack In The Box's 2025 Franchise Disclosure Document, the payment of the Development Fee is deferred in Minnesota. For both single and multi-unit development agreements, Jack In The Box will defer the payment of the Development Fee until the first franchised restaurant opens for business. Upon the opening of the first franchised restaurant, the developer is required to pay the Development Fee to Jack In The Box.
This deferral is in recognition of the requirements of the Minnesota Franchises Law, specifically Minn. Stat. §§ 80C.01 through 80C.22, and the related rules and regulations. This amendment to the Development Agreement ensures compliance with Minnesota state law.
This arrangement is more favorable for the franchisee compared to the typical franchise industry practice of requiring the development fee upfront. Deferring the payment until the restaurant opens reduces the initial financial burden on the franchisee and aligns the payment with the commencement of business operations.