One of the leading restaurants that offer quick service in the United States is Jack in the Box. This restaurant sells standard fast-food meals such as burgers, soft drinks, and fries. They also sell salads, tacos, and other breakfast meals. Franchising Jack in the Box can be a good option if you are looking for one. There are many things that you will need to consider before you can franchise this business. And the most important one is the cost. So how much does Jack in The Box franchise cost?
Average Jack in The Box Franchise Startup Fee
First of all, why franchise Jack in The Box? Well, it is because Jack in the Box can offer you a lot of room for development. As of now, there are around 2,250 franchised Jack in the Box restaurants in only 21 states. Jack in the Box still also have a small franchise community. This means that you will be given a plenty of room for growth.
Jack in the Box is also known for a lot of “first” things such as:
- The first ever major burger restaurant chain to grow and expand the drive-thru dining technique.
- The first ever breakfast sandwich in 1969.
- The first restaurant to have self-serve kiosks.
- First ever portable salad in 1982.
- The first ever restaurant that serves 100% Sirloin burger in 2007.
Just like any other restaurant businesses, Jack in the Box Company also has financial requirements that you have to qualify. You should at least have a net worth of around $1,500,000 and a liquid cash of around $750,000. You are also required to have a minimum of 5 years’ experience as a multi-unit restaurant operator. You should also have a great passion for the industry of fast-food. If you qualify all the criteria. You are ready to go.
The average total Jack in the Box franchise cost usually runs around $1,328,000 up to $2,427,000. And as usual, it all depends on various factors. To be precise, here is the breakdown of the total cost:
- Startup Fee – This is the first and foremost cost you will have to make. If you qualify all the requirements given by the company, you will then need to pay the Jack in the Box franchise startup fee which is around $50,000. Keep in mind that the cost might increase because of any tax or extra fees charged by the company. The standard term usually lasts up to 20 years. However, if you plan to franchise the restaurant for less than 20 years, the startup fee will be $2,500 for every year.
- Survey of Trade Area Fee – You are also required to have a survey of the trade area. The cost for a single site survey can run around $7,000. The price already includes extra expenses.
- Space – The land is also an important factor for the cost. The cost of land rental or land purchase usually depends on the size and the property’s location. As for Jack in the Box, you are required to have 20,000 square feet up to 30,000 square feet for the front. 2,032 square feet up to 2,561 square feet for the restaurant building, and a parking lot that can accommodate 20 up to 30 spaces.
- Architect Fee – You will also need to hire a professional architect for the design of your restaurant. The usual cost for this factors normally runs around $40,000 on the lower end and up to $165,000 on the higher end.
- Assessment of the Environment – You are also required to have an assessment of the environment around your restaurant. This usually takes up to 3 phases. The first phase usually costs around $2,500 up to $3,500. The second phase can cost you around $10,000 up to $20,000. And the third phase can cost you more than $30,000.
- Site Work – This factor usually includes the site improvements such as excavation, utility work, grading, outdoor lighting, and much more. The cost usually runs around $200,000 up to $470,000.
- Building Construction – After the site work, you will immediately proceed to the construction of the building. This can be the biggest factor that can add up to your total Jack in the Box franchise cost. The cost for this factor greatly depends on the size, the condition, and the location of the building. Expect to spend around $418,000 on the lower end and up to $622,000 on the higher end.
- Fixtures and Furniture – The cost depends on the size and the style of your kitchen and as well as the size of the dining room. Expect to spend around $340,000 on the lower end and $441,000 on the higher end.
- Operational Equipment – This factor includes the computer hardware and software needed for your business, POS systems, IT equipment, and other systems. Expect to spend around $35,000 up to $45,000 for this factor.
- Startup Inventory – For your inventory, you are required to purchase it from an approved Jack in the Box supplier. This includes the ingredients and other supplies such as paper items and cleaning supplies. Expect to spend around $12,000 up to $20,000.
- Operational Funds – Almost every business will require the owner to finance the first 3-month operation of the restaurant. This is because you will not earn much during that period of time. You should prepare at least $165,000 on the lower end and $458,000 on the higher end for this one. This includes the payroll of your employees, compensation, ongoing purchases, repairs, utilities, and more.
Now that you know how much does Jack in the Box franchise startup fee is, you are also obliged to know the cost that will be associated as your business operates. One of it is the royalty fee. As for Jack in the Box, you will have to pay the royalty fee which is equivalent to 5% of your gross sales.The Balance can help you understand more about royalty fees. Another ongoing fee that you will have to consider is the Marketing and Advertising fee which is equivalent to 5% of your gross sales.