Under what grounds can a Jack In The Box licensee terminate the License Agreement?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
ollowing sentence:
The franchisor will protect the franchisee's right to use the trademarks, service marks, trade names, logotypes or other commercial symbols and/or indemnify the franchisee from any loss, costs or expenses arising out of any claim, suit or demand regarding the use of the name.
- Item 17 of the Disclosure Document, "Renewal, Termination, Transfer, and Dispute Resolution," is supplemented by the following:
With respect to franchisees/licensees/developers governed by Minnesota law, we will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4, and 5 which require, except in certain specified cases, that a franchisee/licensee/developer be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice of non-renewal of the Franchise /
License / Development Agreement, and that consent to the transfer of the franchise/license/development not be unreasonably withheld.
Pursuant to Minn. Rule 2860.4400D, any general release of claims that you or a transferor may have against us or our shareholders, directors, employees and agents, including without limitation claims arising under federal, state, and local laws and regulations shall exclude claims you or a transferor may have under the Minnesota Franchise Law and the Rules and Regulations promulgated thereunder by the Commissioner of Commerce.
Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidated damages, termination penalties or judgment notes.
Source: Item 22 — CONTRACTS (FDD page 94)
What This Means (2025 FDD)
The 2025 Jack In The Box Franchise Disclosure Document includes several state-specific amendments that address franchise termination and non-renewal rights. For instance, Minnesota law requires that Jack In The Box provide franchisees with 90 days' notice of termination (with 60 days to cure) except in certain specified cases. They must also provide 180 days' notice of non-renewal of the Franchise/License/Development Agreement. Additionally, consent to the transfer of the franchise/license/development cannot be unreasonably withheld. These stipulations ensure franchisees have adequate time to address any issues before termination or non-renewal occurs.
In Hawaii, Jack In The Box is required to compensate the franchisee upon termination or refusal to renew the franchise for the fair market value of inventory, supplies, equipment, and furnishings purchased from the company or a designated supplier. However, personalized materials with no value to the company need not be compensated. If Jack In The Box refuses to renew a franchise to convert it to a company-owned operation, they must also compensate the franchisee for the loss of goodwill. The company can deduct reasonable costs for removing and disposing of the franchisee's inventory, supplies, equipment, and furnishings, and may offset any moneys due to the company.
These state-specific regulations highlight the importance of franchisees understanding their rights and the conditions under which they can terminate the agreement. The amendments aim to protect franchisees from potentially unfair practices related to termination, non-renewal, and transfer of the franchise. Prospective franchisees should carefully review these state-specific amendments and consult with legal counsel to fully understand their rights and obligations under the License Agreement.