Do you want to open a restaurant business by buying Jack in the Box franchise? If YES, here is how much it cost to open a Jack in the Box franchise. Jack in the Box has grown to become the ideal place for those who live outside the box. It has become a place where customers can try new things and order what they want when they want it, while always getting it fast, hot and fresh.
This company started in 1951 and has grown to become one of the nation’s top fast-food burger chains with over 2,200 quick-serve restaurants in the U.S. and Guam. Over the years, Jack in the Box spearheaded conveniences that would become industry standards like the drive-thru, breakfast sandwiches and portable salads. Today, they feature one of the largest and most distinctive menus in the quick-serve restaurant space. Everything from burgers to tacos to egg rolls.
Jack in the Box also franchises quick-service restaurants, which serve a variety of foods, including hamburgers, specialty sandwiches, fries, tacos, salads, drinks and side items. The company offers franchises for restaurants that are already built, as well as restaurants that franchisees are responsible for building.
The company runs a training program for new franchisees that lasts approximately 10 to 12 weeks (400 hours) long, and takes place in San Diego, California. Franchisees are expected to complete the entire training program before they get approved to run a Jack in the Box restaurant.
Notably, the duration of the initial franchise term offered by the company is negotiated, and there are no rights of renewal. The company reserves the right to decide to grant the franchisee a new franchise (rewrite) based upon a number of factors.
Also have it in mind that Jack in the Box does not regularly offer financing in connection with the establishment or operation of new franchised restaurants. In limited circumstances, the company may choose build-to-suit arrangements to assist franchisees in meeting construction obligations.
Under the current Development Incentive Program, if franchisees open the restaurant in accordance with the time frames noted in the Development Agreement, and certain other requirements are met, they may also choose an option where Jack in the Box or one of its affiliates will loan them $250,000 at zero percent interest after ground break to be used toward development costs.
Financial Requirements of Opening a Jack in the Box Franchise
- Initial Franchise Fee: $0 – $50,000
- Free for Trade Area Survey Analysis (plus expenses): $4,500 – $7,000 (Land not Included)
- Fee for Architect/Engineering Services: $49,000 – $166,000
- Environmental Assessment: $2,500 – $34,000
- On-site Improvements: $286,000 – $507,000
- Building Improvements: $611,000 – $785,000
- Furniture, Fixtures and Equipment: $408,000 – $469,000
- IT Equipment and Installation : $45,000 – $60,000
- Computer-Related Services and Licensing: $1,000 – $1,000
- Initial Inventory: $12,000 – $20,000
- Pre-Opening Training and Inventory Expenses: $50,000 – $55,000
- Pre-Opening Additional Funds: $14,000 – $17,000
- Uniforms: $1,500 – $3,000
- Operating Cash: $1,200 – $3,000
- Business Licenses and Utility Deposits: $500 – $3,000
- Additional Funds (3 months): $165,300 – $458,600.
Total Estimated Cost for Opening a Jack in the Box Restaurant: $1,651,500 – $2,638,000
This estimated cost is excluding land, financing and certain other costs.
10. Important Tips to Consider When Buying a Jack in the Box Franchise
If you’re considering this reputable restaurant franchise, there are factors and tips you need to have in mind before you sign on the “dotted line.” First, it is advisable to do your homework and due diligence. Here are suggested tips to help steer your decision and hopefully guide you all through the process.
- Learn everything you can about Jack in the Box Franchise and study what is called a Franchise Disclosure Document” (FDD). This document contains important information on the solvency of the company. This is information the franchise company is required to disclose by law.
- Research the company’s projected overall return on investment. It is crucial to know, especially for long-term insurance, on the partnership being successful. You need to know what the profit versus liability is.
- Find out everything about the company’s management team. Do they as a group and as individuals have a successful track record? How strong is the company’s training program? This will be beneficial long-term if you need counsel moving forward in your growth.
- Find and talk to current and former Jack in the Box operators. This is pertinent. Have the current franchise operators had a good experience? Are they in it for the long haul? Are they making a profit? It’s also important to know why past franchises are gone.
- Research the long-term viability of the company. Do they have a track record? Are they a start-up? Do they have good food? Experts’ advice you go into the partnership expecting to have a 10—30-year deal and commitment. You should be in it for the long haul.
- Know the market where you want to locate your Jack in the Box franchise. A pioneer territory (or state) is more risky and difficult than an established market area. Jack in the Box offers exclusive market rights with a franchise operator for three-to-five miles in an existing territory. Real estate, location, parking, and competitor proximity are key elements for a good location.
- Find out the level of complexity to operate. With the right guidance and thorough franchisor training, is it somewhat turnkey? Some are complex, while others are easy. Do your homework.
- Know your intended management scenario. Do you plan to be an owner/operator? Is your plan to invest in hiring a manager? Regardless, the owner/operator must have an intimate knowledge of the operation and be able to jump in. What happens when a manager abruptly quits? If you don’t know the operation, that means trouble.
- Take your time to know about the company’s average system sales growth. Are comp store sales growing, flat or declining?
- Although Jack in the Box sometimes offers financial assistance, experience has proven that an all-cash upfront investment is the way to go. If you have some peaks and valleys in business, you don’t want to be over your head. Even better is to have a cash surplus to help you through some business downtimes.