What are the specific requirements for a Jack In The Box franchisee's profit and loss statements?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
Attached hereto as Exhibit A are the audited consolidated financial statements of our parent company, Jack in the Box SPV Guarantor, LLC and subsidiaries ("SPV"), as
of September 29, 2024 and October 1, 2023, the related consolidated statements of earnings, member's deficit, and cash flows for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, and the unaudited consolidated statements as of January 19, 2025.
| 2024 | 2023 | 2022 | ||
|---|---|---|---|---|
| Revenues by segment: | ||||
| Jack in the Box restaurant operations | $ | 1,197,420 | $ 1,195,311 | $ 1,151,188 |
| Jack in the Box segment profit | $ | 362,377 | $ 381,171 | $ 383,794 |
Our franchise arrangements generally provide for an initial franchise fee per restaurant for a 20-year term, and generally require that franchisees pay royalty and marketing fees based upon a percentage of gross sales. The agreements also require franchisees to pay technology fees, as well as sourcing fees for Jack in the Box franchise agreements.
Accounts and other receivables, net — Our accounts and other receivables, net is primarily comprised of receivables from franchisees, tenants, credit card processors, and insurance receivables. Franchisee receivables primarily include rents, property taxes, royalties, marketing, sourcing and technology support fees associated with lease and franchise agreements, and notes from certain of our franchisees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the specific requirements for a Jack In The Box franchisee's profit and loss statements are not detailed in Item 21. Item 21 includes the consolidated financial statements of Jack in the Box SPV Guarantor, LLC and subsidiaries as of September 29, 2024, and October 1, 2023, along with related consolidated statements. The FDD also contains unaudited consolidated statements as of January 19, 2025. These financial statements offer a broad overview of the company's financial performance but do not specify the requirements for individual franchisee reporting. The financial statements include information such as revenues by segment, segment profit reconciliation, depreciation and amortization, and other financial metrics. These figures provide insight into the overall financial health of Jack In The Box and its various segments, including restaurant operations and shared services. The revenues for Jack In The Box restaurant operations were $1,197,420,000 in 2024 and $1,195,311,000 in 2023. The Jack In The Box segment profit was $362,377,000 in 2024 and $381,171,000 in 2023. These figures are in thousands. The FDD also mentions that franchise arrangements generally require franchisees to pay royalty and marketing fees based upon a percentage of gross sales, as well as technology and sourcing fees. However, the FDD does not specify how franchisees should prepare their profit and loss statements.
While the FDD provides consolidated financial data and discusses revenue streams from franchisees, it lacks specific instructions or requirements for how a franchisee must structure or submit their profit and loss statements. The document does mention that franchisee receivables primarily include rents, property taxes, royalties, marketing, sourcing, and technology support fees associated with lease and franchise agreements. This suggests that franchisees are required to report these items, but the exact format and frequency of reporting are not detailed. The absence of specific requirements in the FDD means that prospective franchisees need to seek additional clarification from Jack In The Box regarding the expected format, content, and submission process for their financial reports.
Therefore, a prospective franchisee should directly ask Jack In The Box for detailed guidelines on the required format, content, and frequency of submitting profit and loss statements. Understanding these requirements is crucial for franchisees to accurately track their financial performance and comply with Jack In The Box's reporting standards. This information is essential for managing their business effectively and maintaining a transparent financial relationship with the franchisor.