If you’re looking to open a franchise in the United States, Jack in the Box is a great option to consider. The restaurant is known for selling fast foods like fries and soft drinks. Other things sold there are salads, tacos, and other excellent meals. When thinking of the Jack in the Box franchise, there are several factors you need to consider, like costs for starting with Jack in the Box and royalties associated. This article critically looks into the royalties associated with the Jack in the Box franchise and the important cost you’ll incur in your journey to owning the franchise.
Why Jack in the Box?
Suppose you’ve been asking the question, “Why Jack in the Box.” Well, the answer to this is simple. This is because Jack in the Box will give you room for development and expansion.
Currently, Jack in the Box has about 2,250 Jack in the Box franchise restaurants in just 21 states, which means that the franchise community of Jack in the Box still has a lot of room to accommodate expansion. With this franchise, you still have enough space for growth.
Aside from having room for development, the Jack in the Box brand is notable for being first in a number of new developments. Listed below are some of the things pioneered by Jack in the Box.
- The first portable salad in 1982
- The first breakfast sandwich in 1969
- The first restaurant to serve the 100% sirloin burger in 2007
- The first burger restaurant to grow and adapt the drive-thru dining method
- The first restaurant to start the self-serve kiosk
Startup Fee For Jack in the Box
While the Jack in the Box franchise has many promising features, there are some financial requirements you need to meet before you can start a franchise. To start with, you need a net worth of about $5,000,000 and liquid cash of about $1,500,000. Also, you need at least 5 years of experience as a multi-unit restaurant operator. In addition to this, you must have a great passion for running a fast-food restaurant. Once you tick all these boxes, you are ready to go.
On average, the cost of the Jack in the Box franchise is between $1,328 000 to $2,427 000. It would be best if you, however, kept in mind that the amount you will be spending, in the end, depends on several factors. Below is a breakdown of costs you’ll have to incur.
Royalty Fees
For this franchise, you’ll be required to pay a royalty fee equal to 5% of your gross sales. Also, an ongoing fee you need to keep in mind is the Marketing and Advertising Fee which is equal to 5% of your gross sales. You will also need to pay a 40% royalty fee on net revenues from any games or devices.
Trade Area Survey Fee
For your franchise, you will need a trade area, and the survey needs to be done. The cost for this survey can be as high as $7,000. It should be noted that miscellaneous expenses are part of this cost.
Environment Assessment
The environment where your restaurant will be located also needs to be assessed, and this assessment is always in three phases. The first phase is around $2,500 to $3,500, while the second phase can be around $10,000 to $20,000. Lastly, the third phase can be as high as you spend above $30,000
Building Construction
Of course, you will need a building to run your business. This comes after a survey and assessment must have been done. The amount you’ll be spending here is not fixed. The cost of the building depends on factors like size, type, and location. If you try to minimize cost, you should spend around $420,000 and on the high side, expect to spend about $625,000.
Equipment for Operations
These are the equipment that you’ll be needing in your daily activities. Examples are computer hardware and software, POS outlets, IT equipment, and other important gadgets for the smooth running of the franchise. You should spend about $35,000 to $45,000 on this.
Architect Fee
You will need the services of an architect for the design of your franchise. Depending on what you desire, you can spend as low as $40,000 and as high as $165,000
Site Work
This is another activity that takes quite a lot of money. Here, you should budget between $200,000 to $470,000
Fixtures and Furniture
The amount you’ll be spending here depends on the style, size, and how you want your dining to look. Expect to spend between $340,000 to $441,000.
Operational Cost
As a business owner, you should expect to find the first three months of your business operations. For this, you should prepare about $165,000 to $458,000. Things this money will be covered include; purchases, payroll, utilities, compensation, repairs, etc.
Space
Another important thing to consider is space. For the Jack in the Box franchise, you must have between 20,000 to 30,000 square feet in the front and 2,032 to 2,561 square feet for the restaurant building. A parking lot that can accommodate 20 to 30 spaces is also needed.
Startup Inventory
You are expected to get your inventory from an approved Jack in the Box supplier. The inventory will include; ingredients, paper, and cleaning supplies. For this, expect to spend about $12,000 to $20,000.
Owning a franchise is a great thing. However, it would be best to keep in mind that owning one comes with some costs and payment of royalty fees. To save yourself stress, ensure you understand the cost and royalty fees of running a franchise before starting the journey.
