How Much Does a Food Franchise in the USA Cost?

Are you interested in learning how much it costs to start a food franchise in the USA?

At Jack in the Box, some of the most common franchising questions we receive are about our costs, fees, and ongoing royalties.

In this article, we'll look at how much it costs to open a food franchise in the USA.

Franchise Fees

One of the first costs you’ll have to pay in order to start a drive-thru franchise is the initial franchise fee.

This is the cost of entry for access to benefits like the franchisor’s brand, existing customer base, business systems, real estate support, and ongoing training.

At Jack in the Box, our franchise fee is $50,000 per location plus any taxes or fees related to the collection or processing of your payment.

Payment of this fee is required for each restaurant you plan to build and due when you sign the Franchise Agreement.

These fees are nonrefundable and will vary based on the brand of burger franchise you’re interested in.

Ongoing Royalties

You’ll notice most drive-thru franchises will have ongoing royalty fees their franchisees must pay on a regular basis.

For example, we have two ongoing royalties at Jack in the Box:

• 5% Royalty of Gross Sales
• 5% Marketing Royalty of Gross Sales

These royalties ensure you have the best possible resources to run your business and bring customers to your drive-thru restaurant.

What Do I Get for My Fees & Royalties?

When you’re required to make ongoing royalty payments, you might wonder, “Where does all this money go and what do I get?”

Here is a list with some of the things your royalties get you at Jack in the Box:

• Use of the Jack in the Box® brand name, systems, logo, and store design.
• A comprehensive JIB Management Training Program designed to prepare you for daily operation of your restaurant.
• Site selection support.
• Construction & design support. Conceptual floor plans and site plans are provided. These must be sealed by an approved architect before submitting them to local government entities.
• Franchise development support and a step-by-step guide through the process of new-store layout, ordering of equipment, furniture, and fixtures.
• Support and training assistance in pre-opening and opening.
• Ongoing support from: JIB Franchise Business Consultants, the JIB Culinary & Innovation Team, and R&D. Plus, purchasing, distribution, and marketing support for local store.

You can learn more about where your fees and royalties go by asking your franchise business consultant.

How Much Does a Food Franchise in the USA Cost?

In summary, your final price and overall drive-thru franchise costs will vary based on a wide variety of factors.

The estimated initial investment for a Jack in the Box Franchise is $1,810,600 - $4,207,500 excluding land, financing, and certain other costs. We provide a breakdown of this number in our Item 7 found in our Franchise Disclosure Document.

One of the best ways to figure out how much money you’ll need is to research the estimated initial investment for each brand.

Your initial investment includes virtually everything it takes to start a new restaurant:

• One-time initial franchise fee, up to $50k
• Building improvements, up to $785k
• Initial inventory, up to $20k
• Three months of operating funds

These initial investment figures are based on Company-developed restaurant costs to open MK9 and MK10 prototypical buildings in fiscal years 2017 to 2019.

The cost of land will vary widely, depending upon size and location of the property and whether you purchase/own the land or enter a lease arrangement.

Multi-Unit Franchise Incentives

You might be able to lower your overall food franchise costs by asking if multi-unit franchise incentives are available.

Jack in the Box offers an incentive for multi-unit franchisees who choose to sign up for three or more stores under our Development Incentive Program.

To help incentivize growth in key markets, Jack in the Box offers qualifying multi-unit investors two different incentive options.

Under the Development Incentive Program for qualified buyers in 2023, if you sign a Development Agreement for a minimum of three (3) restaurants to be developed and opened under the development schedule during the time frames specified in the Development Agreement, and certain other requirements are met, you may be eligible for one the following incentive options, at our sole discretion:

• OPTION A: The Royalty (which is currently 5% of Gross Sales) will be reduced to: (i) 1% of Gross Sales for the first year; (ii) 2% of Gross Sales for the second year; (iii) 3% of Gross Sales for the third year; (iv) 4% of Gross Sales for the fourth year; and (v) 5% of Gross Sales for all subsequent years.
• OPTION B: If you open the Restaurant on or before the required date in the development schedule, we will loan you $150,000 at 0% interest to be used solely for development costs associated with that restaurant. The loan will be repaid by crediting 100% of the royalty payments for that restaurant otherwise due until the loan is paid in full (i.e., payments will be made by crediting the appropriate portion of royalty payments toward the principal balance outstanding). If the particular restaurant is sold or permanently closed and the loan has not been fully repaid, the remaining principal balance is due in full.

More details about this program can be found in our Franchise Disclosure Document.

Check Out These Additional Resources

We hope this article gave you a better understanding of how much it costs to open a food franchise in the USA.

At Jack in the Box, we work with our franchisees every step of the way in order to get their restaurants up and running.

Here are some additional online resources you may like to check out:

• Jack in the Box vs McDonald’s: Which Franchise Is Best?
• 15 Best Burger Franchises to Own From This Year
• What Are the Jack in the Box Franchise Requirements?

If you have any questions, please contact our franchise sales and support team.