Does Jack In The Box have a right of first refusal to acquire a franchisee's business?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Nontraditional License Agreement | Summary | |
|---|---|---|---|
| m. | Conditions for the Company's approval of transfer | § 14 | Updated Certification of Entity Structure Form, complete financials, payment of transfer fee, execution of a General Release of the Company, payment of all monies owed, material defaults corrected, personal guarantees signed, training completed, assignment agreement or new franchise agreement on then-current form, and any other conditions. 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 | |
| 0. | The Company's option to purchase your business | § 16.B. | Upon termination or expiration, we may purchase certain materials that have our trade names or marks at your cost and the restaurant equipment, furniture, fixtures and signs at fair market value. |
| p. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 70–81)
What This Means (2025 FDD)
According to the 2025 Jack In The Box Franchise Disclosure Document, whether Jack In The Box has a right of first refusal depends on the type of agreement. For a standard Franchise Agreement, Jack In The Box does have the right of first refusal to acquire a franchisee's business. Specifically, Jack In The Box can match any offer to buy the franchisee's business or any portion of it, including real estate, fixtures, other assets, and/or securities. This is detailed in Section 16 of the Franchise Agreement.
However, for a Nontraditional License Agreement, Jack In The Box does not have a right of first refusal to acquire the franchisee's business. This is explicitly stated as "Not Applicable" in the summary table describing transfer provisions under the Nontraditional License Agreement.
In practical terms, if you are entering into a standard Franchise Agreement with Jack In The Box, you must be aware that if you decide to sell your business, Jack In The Box has the contractual right to step in and purchase it themselves by matching any offer you receive from a third party. This could impact your ability to sell to a preferred buyer or negotiate the terms of a sale. If you have a Nontraditional License Agreement, this restriction does not apply.