Jack In The Box Franchise Cost, Profit, Failure Rate 2024

Jack In The Box is a fast food icon, serving delicious burgers, tacos, and other classic American fares for over 70 years.

With its iconic yellow-and-red logo and signature marketing campaigns, Jack In The Box has become an instantly recognizable name across the United States.

Considering this beloved fast food chain’s vast reach, many entrepreneurs are considering investing in a Jack In The Box franchise.

Opening your own Jack In The Box franchise can give you a chance to share in the company’s success and reputation while providing customers with quality meals at an affordable price.

So, how do you get started? Here’s everything you need to know about opening a Jack In The Box franchise, from the initial costs to requirements and more.

Jack In The Box Franchise

About Jack In The Box

Jack In The Box is an American quick-service restaurant chain with locations throughout the United States.

Founded in 1951, Jack In The Box has grown to become one of the most recognizable fast food brands in America.

The restaurant is well-known for its signature tacos and burgers, as well as its quirky mascot, Jack the Clown.

On top of these classic menu items, Jack In The Box also serves a variety of other delicious items like chicken nuggets, sandwiches, and breakfast items.

At Jack In The Box, customers appreciate not only the tasty food but also the convenience.

All restaurants feature drive-thrus, and most offer 24-hour service so that you can get your favorite meal anytime, day or night.

Moreover, many locations offer online ordering and delivery options for added convenience.


History Of Jack In The Box

History Of Jack In The Box

Jack In The Box was founded in 1951 by Robert Oscar Peterson, who already owned several successful Topsy’s restaurants.

He opened his first Topsy’s Drive-In at El Cajon Boulevard in San Diego and had the restaurant decorated with circus-like décor.

After opening several more Topsy’s Drive-Ins, Peterson obtained rights for an intercom ordering concept that he used for his next venture: converting the El Cajon Boulevard Topsy’s into Jack In The Box – a hamburger stand that provided drive-through service.

Jack In The Box was conceived as a “modern food machine” due to its quick service capabilities and quickly became a go-to spot for delicious burgers, chicken tenders, and other fast food items.

The 70s saw the most prolific growth period for Jack In The Box as they started franchising locations across the US.

Today, there are over Jack In The Box 2,200 locations in the US and Guam.

The chain is estimated to serve over 500 million annual guests, making it one of the country’s largest and most successful fast-food franchises.


Jack In The Box Franchise Model

Cost or FeeAmount or Percentage
Initial Investment to own a franchise$1,697,000–$2,694,600
FranchiseYES
Franchise Fee$50,000
Royalty Fee (5% of weekly Net Sales)5%
Liquidity$500,000
Estimated Outlets2,200+

How Much Does It Cost To Open A Jack In The Box Franchise?

The cost of opening a Jack In The Box franchise can vary greatly and depends on numerous factors, including size and location. 

Generally, the initial investment for a Jack In The Box franchise is estimated to be between $1,697,000 and $2,694,600.

This includes the franchise fee of $50,000 per location as well as the cost of fixtures and equipment. 

In addition to the initial investment costs, you must also have access to a minimum liquidity requirement of $500,000 and meet a net worth requirement of at least $1.5 million to qualify for franchising with Jack In The Box. 

Once your restaurant is up and running, you will be subject to ongoing fees such as royalties and advertising fees.

Franchisees are required to pay a royalty fee of 5% and a marketing fee of 5%. 

The initial investment costs can be steep for opening a Jack In The Box franchise.

However, it generally pays off in the long run due to the well-known brand recognition that comes with being part of this beloved chain. 


Jack In The Box Franchise Requirements

Jack In The Box Franchise Requirements

In order to become a Jack In The Box franchisee, you must meet certain requirements.

Firstly, you must have access to a minimum liquidity requirement of $500,000 and meet a net worth requirement of at least $1.5 million. 

Additionally, you must possess strong business acumen and be able to demonstrate this through past entrepreneurial achievements or professional experiences.

While restaurant experience is preferred, it is not required; however, any previous food service experience may give you an edge when applying. 

Jack In The Box looks for franchisees who possess an entrepreneurial spirit and commitment to providing customers with quality products and services.

You should have the necessary skills and ability to manage employees, maintain the property and equipment in good condition, as well as ensure that all health and safety regulations are met. 


Jack In The Box Franchise Training And Support

Jack In The Box provides a comprehensive training program to all of its franchisees, designed to help them successfully launch and operate their restaurant.

The 10-14-week training program consists of a combination of computer-based and on-the-job training, with 183 hours devoted to on-the-job training and 49 hours dedicated to classroom instruction. 

The on-the-job portion of the training is conducted at an existing Jack In The Box location so that franchisees can gain first-hand experience in successfully operating the restaurant business.

During this time, they will learn about employee management, safety procedures, and product preparation standards in order to ensure consistency across all locations. 

The classroom portion focuses on providing franchisees with knowledge about Jack In The Box’s proprietary management systems.

This includes lessons about customer service, marketing strategies, and financial management best practices. 

In addition to the initial training program, Jack In The Box also offers ongoing support from their regionally based Franchise Business Consultant, who regularly visits each location to provide assistance and guidance when needed.

They also have a 24/7 help desk that can be contacted anytime if an issue arises or additional assistance is required. 


How Much Does Jack In The Box Franchise Make?

In 2020, the average net gross for a franchised store were $1,575,246. If we consider a profit margin of 10%, the average profit for a Jack In The Box franchise owner would be around $157,524 for that year.

This is how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1575246.00
Rent11.25%(177215.18)
Insurance5.63%(88607.59)
Salaries22.50%(354430.35)
Franchise Royalty Fees5.63%(88607.59)
Utilities2.25%(35443.04)
Cost of Goods Sold (COGS)28.13%(443037.94)
Labor (Variable)14.63%(230379.73)
Total (Expenses)90.00%(1417721.40)
Net Profit10.00%157524.60

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Jack In The Box Franchise Terms Of Agreement & Renewal

The Jack In The Box franchise agreement is for a term of 20 years and does not include any renewal or extension rights.

At the end of the initial agreement, the franchisor may decide to grant a new franchise based on a few factors. 

When considering renewing or granting a new franchise, the franchisor will evaluate such things as operating performance, compliance with the Jack In The Box brand standards and policies, adherence to legal requirements, and overall financial stability. 


Jack In The Box Franchise Failure Rate

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20151,8191,836+17
20161,8361,838+2
20171,8381,975+137

For the Franchised outlets:

  • In 2015, the growth rate was (17)/1,819×100≈0.93%
  • In 2016, the growth rate was (2)/1,836×100≈0.10%
  • In 2017, the growth rate was (137)/1,838×100≈0.07%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2015431413-18
2016413417+4
2017417276-141

For the Company-Owned outlets:

  • In 2015, the failure rate was (18)/431×100≈4.17%
  • In 2016, the growth rate was (4)/413×100≈0.96%
  • In 2017, the failure rate was (141)/417×100≈33.81%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20152,2502,249-1
20162,2492,2556
20172,2552,251-4

For Total outlets:

  • In 2015, the failure rate was (1)/2250×100≈0.04%
  • In 2016, the growth rate was (6)/2249×100≈0.26%
  • In 2017, the failure rate was (4)/2255×100≈0.17%

As per the figures, we can see that the franchised outlets for Jack In The Box grew for the years 2015-2017, showing a growth rate between 0.93% and 0.07%.

On the other hand, for company-owned outlets, the failure rate of Jack In The Box ranges between 4.17% and 33.81%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that Jack In The Box franchise has seen a minimal drop in the number of outlets for 2015-2017 showing total failure rate between 0.04% and 0.17%.


Jack In The Box Franchise Payback Period

With a midpoint investment of $2,195,800 and an estimated 10% profit on the average net sales of $1,575,246 from 2020, the yearly profit would be $157,524.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Midpoint Investment / Yearly Profit = $2,195,800/ $157,524 = 13.9 years

Based on these figures, it would take around 14 years to pay back the initial investment fee of $2,195,800 for the Jack In The Box franchise on average. However, note that the payback period might vary depending on the sales, profit, etc. of your franchise store.


Jack In The Box Franchise Obligations And Restrictions

Jack In The Box Franchise Obligations

Jack In The Box franchisees is required to adhere to all operational standards as set forth in the franchise agreement.

They must ensure that their restaurants meet the brand’s quality, service, and cleanliness standards at all times.

Franchisees are also obligated to maintain their restaurant’s interior and exterior appearance in accordance with Jack In The Box’s guidelines. 

Along with meeting the operational standards, Jack In The Box franchisees must also adhere to specific menu requirements.

This includes serving only products the franchisor has approved and not adding unauthorized items to the menu. 

Franchisees must adhere to these menu requirements as they help protect the brand image and ensure consistent quality across all locations. 


Jack In The Box Franchise Financial Assistance

Jack In The Box does not provide financing directly to franchisees for the purchase of a Jack In The Box restaurant.

However, the franchisor does have established relationships with SBA lenders and other financing sources that can help new franchisees secure the funding they need to buy an existing or start-up restaurant. 

The Small Business Administration (SBA) is a government agency that provides financial assistance to small business owners and entrepreneurs.

They offer several loan programs, such as 7(a) loans, 504 loans, and microloans, which are designed specifically to help new and existing businesses get the funding they need to start or expand their business. 

Jack In The Box has established relationships with these SBA lenders in order to make it easier for their franchisees to get the financing they need.

They also provide access to other capital resources that may be available depending on the individual situation. 

For those looking to open a franchise in the restaurant industry, possibilities include Cook-Out, Underdog BBQ Franchise, Olive Garden, Sweetgreen Franchise, and Tim Horton’s.


Jack In The Box Comparison

CompanyJack In The BoxSubway
Year Founded19511965
Franchise Fee$50,000$15,000
Initial Investment$1,697,000–$2,694,600$116,000–$263,000
Number of Outlets2,200+44,000+

Conclusion

Jack In The Box is an excellent opportunity for anyone interested in owning and operating their own business.

The quick-service restaurant franchise has made a name for itself by offering quality products, great customer service, and a clean, inviting atmosphere. 

Now that you have all the necessary information about Jack In The Box and its franchise agreement, you can make an informed decision on whether it’s the right fit for you. 


FAQs

Is Jack In The Box A Franchise?

Yes, Jack In The Box is a franchise and has been offering franchise opportunities since the 1970s.

Who Founded Jack In The Box?

Jack In The Box was founded by Robert O. Peterson in 1951.

How Many Jack In The Box Locations Are There?

There are currently over 2,200 Jack In The Box locations in the United States and Guam.

Is Opening A Jack In The Box Franchise Worth It?

Opening a Jack In The Box franchise can be incredibly rewarding if you are willing to put in the hard work and dedication it requires. 

How many locations does Jack In The Box have?

Jack In The Box have approximately 2,200 locations in the United States and Guam.

Where is Jack In The Box headquartered?

Jack In The Box is headquartered in San Diego, California.

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