Does Jack In The Box have the right to approve transfers of the Development Agreement by the developer?
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. |
| k. | "Transfer" by you - defined | § 11 (Single Unit) § 11 (Multi-Unit) | Includes transfer of any interest in Development Agreement, Developer, or all or substantially all of the Developer's business. |
| l. | The Company's approval of transfer by you | § 11.B (Single Unit) § 11.B (Multi Unit) | We have the right to approve transfers. |
| m. | Conditions for the Company's approval of transfer | § 11.D (Single Unit) § 11.D (Multi Unit) | No default, execution of new Development Agreement, a General Release of the Company, and any applicable personal guarantees, payment of transfer fee, and others; see § 8.D. The general release is subject to restrictions in applicable state law. |
| n. | The Company's right of first refusal to acquire your business | Not Applicable |
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, Jack In The Box retains the right to approve any transfers of the Development Agreement by the developer. This is a standard practice in franchising, allowing the franchisor to maintain control over who joins their system and ensures that new developers meet their standards.
The FDD specifies that a "transfer" includes the transfer of any interest in the Development Agreement, the Developer entity itself, or substantially all of the Developer's business. This broad definition means that any significant change in ownership or control is subject to Jack In The Box's approval.
Jack In The Box also lists conditions that must be met for a transfer to be approved. These conditions include being in no default, executing a new Development Agreement, providing a General Release of the Company, and any applicable personal guarantees, payment of transfer fee, and others. These conditions are designed to protect Jack In The Box's interests and ensure that the new developer is qualified and committed to the franchise system.