Jack in the Box was set up in 1951 by Robert O Peterson as a hamburger stand. They started the concept of drive-through-focused food service. This hamburger stand was the first major quick service restaurant that used the intercom order system. The Jack in the Box Franchising chain had grown immensely by 1960 across 180 locations and continues to offer franchising opportunities.
You can choose to franchise a newly constructed restaurant or an already existing location. Most of the Jack in the Box locations offer both drive-throughs as well as seating options. However, the franchisor may also permit you to set up non-traditional restaurant formats as well in some cases.
Typically, the investment for a Jack in the Box franchise is between $1,697,000 and $2,694,600. This amount covers everything that is needed to set up the restaurant, like:
- A one-time franchise set-up fee of up to $50,000
- Building improvements that can cost up to $785K
- Cost to build the initial inventory, up to $20K
- Three months of operating funds
Does Jack in the Box Offer Financing?
The franchisor doesn’t offer to finance directly but works with several banks and provides you with contacts. You can also take advantage of other financing options like:
- SBA loans
- Terms loans
- Equipment Financing
- A business line of credit
You can either finance your restaurant with cash or borrow a major part of the amount from one of the options provided above.
Royalties and Other Contributions
Franchisees must pay an ongoing royalty fee of 5% on the monthly gross sales. This rate could be decreased or increased depending on the situation. You must also pay a quarterly royalty fee for devices and games like slot machines, ATMs, and arcade boxes. This royalty should be equal to 40% of the net revenues these devices generate. Apart from this, you will also have to pay a marketing fee of 5% of the total gross sales towards the franchise’s marketing program.
You will go through a series of training when you decide to set up a Jack in the Box franchisee. The franchisor guides you and works with you in various steps to ensure your franchise is successful. The training program is approximately 10 to 14 weeks long. It takes place in various locations across the country. You must complete the program successfully to be approved to set up a franchised restaurant. Jack in the Box will also provide training to one of your employees to be a certified franchise restaurant manager. You and your employees will also get access to the restaurant’s web-based training program before your restaurant opens. You may also have to take refresher training and recertification training from time to time.
You should have a designated operator that is approved by the franchisor. You or someone else who has signed the franchise agreement could be the operator. You can also designate someone else to be the operator. This operator should have an ownership interest of at least 25% in the business. They should have good experience in the quick service restaurant industry. This operator should be actively involved in the daily operations of the restaurant. Every restaurant should also have a manager. This manager should have completed the franchisor’s certified restaurant manager training program. You should sell all the menu items from the chain. As per the franchisee agreement, you should operate the restaurant for a minimum of 16 hours per day, 7 days a week, and 52 weeks a year. This can be changed only if you have written consent from the franchisor.
Tips to Set up a Jack in the Box Franchisee
Below are a few tips for setting up a Jack in the Box franchise:
Ensure You Have Enough Funds
You should have a net worth of over $1,50,000. Make sure you have this amount in the capital before setting up the franchise.
Consider the Total Investment Needed
When thinking of capital, consider the total investment cost required to set up the franchise. This cost will include real estate costs, equipment costs, costs for signs, permits, and licenses, uniform costs for employees, and insurance costs.
Assess Market Availability
Study your market and assess whether there is a market for the restaurant chain in your location. No point in setting up a restaurant in an area that doesn’t have any target audience.
Evaluate Your Application
Check and evaluate your application thoroughly before submitting it to the franchisor. You will get a confirmation receipt once the franchisor gets your application.
After applying, you will get a franchisee approval notice after your financial and background checks. You will be approved only if you meet all the requirements of franchise owners.
A successful Jack in the Box franchise can earn you an amount of $1,858,441 on average. But it is important to have all the guidance and information necessary before you become the franchisee. Working with Jack in the Box Franchising can help you understand the franchising concept and build your restaurant business steadily.