Does Jack In The Box require franchisees to purchase or lease real estate from them?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
Real Estate and Building. The Company does not require you to purchase or lease real estate from us in order to develop a Jack in the Box restaurant, but the Company has the right to approve or disapprove sites and does have a market broker program. Our approval of a site is no representation, promise, or guarantee of its success. If you purchase a franchise for a company operated restaurant that will be sold to you, you will be required to lease or sublease the real estate from us. In many major markets that contain both Company and franchisee restaurants, we recommend that you use our approved real estate broker(s) to identify sites to develop, and must work with Company personnel prior to pursuing any opportunities.
The Company has standards and specifications relating to the building design for Jack in the Box restaurants. You do not need to purchase design or construction services from us or a Company-approved supplier, other than brand-specific items as
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 41–46)
What This Means (2025 FDD)
According to the 2025 Jack In The Box Franchise Disclosure Document, franchisees are not required to purchase or lease real estate from the company to develop a restaurant. However, Jack In The Box retains the right to approve or disapprove potential sites. The FDD also mentions a market broker program to assist in site selection. If a franchisee purchases a company-operated restaurant, they will be required to lease or sublease the real estate from Jack In The Box. In major markets with both company and franchisee restaurants, franchisees are recommended to use Jack In The Box's approved real estate brokers and must consult with company personnel before pursuing opportunities.
While franchisees are not obligated to use Jack In The Box for real estate, the company maintains significant control over site selection and building design. Franchisees must adhere to company standards and specifications for building design. Although franchisees are not required to purchase design or construction services from Jack In The Box or its approved suppliers (except for brand-specific items), their architects must be approved by Jack In The Box and be able to access the project management system for exchanging plans and specifications. This ensures that all designs and construction documents align with Jack In The Box's prototypical building standards, which the company can modify over time.
Notably, Jack In The Box receives a substantial amount of revenue from leasing real property to franchisees. In the fiscal year ending September 29, 2024, rental income from these leases amounted to approximately $347 million, representing 28.9% of Jack In The Box's total annual revenue of approximately $1.2 billion. This indicates that while franchisees are not initially required to lease from the company, many do so, making it a significant revenue stream for Jack In The Box. This arrangement gives Jack In The Box considerable influence over the real estate used by its franchisees.
For prospective franchisees, this means they have the option to find their own real estate, but they must get it approved by Jack In The Box. If they buy an existing company-owned store, they must lease the property from Jack In The Box. Given the revenue Jack In The Box derives from leasing, it's important for franchisees to carefully consider the terms and conditions of any lease agreement offered by the company and to factor in potential costs and restrictions associated with site selection and building design.