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Business Description

The franchisor is Jack in the Box Inc. (“the Company,” “JIB,” “we," “us,” or “our”). The franchisee is the person to whom we grant a franchise, and is referred to as “you.” Except in rare cases, we offer franchises only to individuals or groups of individuals. You may be permitted to assign your franchise rights to an entity wholly owned by you, but you would remain personally liable for all obligations under the franchise agreement. We incorporated in Delaware in 1971 as Foodmaker, Inc. In 1999 we changed our name to Jack in the Box: Inc. Jack in the Box Inc. does business as Jack in the Box®. Our principal business address is 9330 Balboa Avenue, San Diego, California ,92123. We have no parent company.

Prior Experience

As of' the end of fiscal year 2017, we operated 276 Jack in the Box restaurants, and had 1,,975 franchised Jack in the Box restaurants (or “outlets”). Through Qdoba Restaurant Corporation (“Qdoba”),, a wholly owned subsidiary Of Jack in the Box Inc. since January 2003, we also operated 726 Qdoba Mexican Eats® and Qdoba Mexican Grill® restaurants in the United States and Canada, of which 385 were company operated and 341 were franchised. We have never offered franchises in any other line of business and are not engaged in any other business.

Business Offered

We both operate Jack in the Box restaurants and offer franchises for the operation of Jack in the Box restaufants. Jack in the Box restaurants offer a variety of foods: primarily hamburgers, specialty sandwiches, french fries, tacos, salads, bowls, drinks and side items. The restaurants are operated under a uniform operating system that includes standards for the building and decor; uniforms; the purchase, preparation and sale of foods; and the operations of the restaurant. Most of our restaurants have drive-thru windows and a seating capacity ranging from 20 to 100 people, but we also have some hontraditional locations. Unless otherwise noted in this disclosure document, all references to a “Franchised Restaurant!’ or “Franchised Location” also Will include a nontraditional restaurant or nontraditiOhal location, respectively, and all references to the “Franchise Agreement” also will include the Nontraditional License Agreement.

Initial Fees

This section describes payments you must make for goods or services received from us or our affiliates before your business opens. Initial Franchise Fee When you sign the Franchise Agreement, you must pay the Company an Initial Franchise Fee. The Initial Franchise Fee is typically $50,000 for each franchised restaurant, plus any tax or other fee imposed upon the Company due to the collection of the Initial Franchise Fee. If your franchise term is for less than the standard 20 years, the Initial Franchise Fee is $2,500 for each year or partial year exceeding six months. If you will be operating at a nontraditional location, the Initial Franchise Fee is $25,000 for each unit plus any taxes and fees imposed on the Company due to collection of the Initial Franchise Fee. The Initial Franchise Fee is fully earned on the date it is received by the Company, and is nonrefundable. We may reduce the Initial Franchise Fee Or accept installment payments. In the past, we have done this for: (i) sales of existing Company-operated restaurants With restaurant sales significantly below system average and/or with an unusual history of business or management problems; (ii) special incentive programs, which are offered at the discretion of, and subject to such restrictions as may be imposed by the Company; (iii) settlement of disputes; and (iv) the reopening of certain closed sites or the approved relocation of a franchise (although you have no right to relocate your franchisei and approval of such requests is rare). During the past fiscal year, the Company collected Initial Franchise Fees ranging from $0 to $50,000, excluding any franchises for which the fee Was waived pursuant to our previous Development Incentive Program (discussed below). Development Fee If you sign a Development Agreement with us, it will give you the right to construct an agreed-upon number of Jack in the Box restaurants in a specified geographic area. When you Sign a Development Agreement you may be required to. pay us a development fee (the “Development Fee”) of $25,000 for each site to be developed unless you qualify for our current Development Incentive Program, as discussed below, in which case the Development Fee is waived. If the Development Fee is required, it is payable When you sign the DevelopmentAgreement, is fully earned by the Company at the time it is received, and is nonrefundable. During the past fiscal year, the company charged uniform development: Fees Qf $25,000 per site, but the waiver of the Development Fee was, not included as part of the Development Incentive Program that was offered during previous fiscal years. Under our current Development Incentive Program, if you open the restaurant during the time frames specified in the Development Agreement, and certain other requirements are met, you will not be charged a Development Fee, and you may also choose one of the following incentive options (see Development Agreement, Exhibit K):: OPTION A: The royalty rate will be reduced to: (i) 0% for the first three years; (ii) 2% for the fourth year; (iii) 3% for the fifth year; (iv) 4% for the Sixth year: and (v) 5% for all subsequent years. OPTION B: Upon opening the restaurant on or before the compliance date, we will loan you $250,000 at 0% interest to be used toward development costs. The loan will be repaid by crediting 100% of the royalties otherwise due until the loan is paid in full (i.e., payments will be made by crediting the appropriate portion of royalties toward the principal balance outstanding), and, unless it has already been paid, is due in full when the developed restaurant is sold or closed. We may stop offering our Current Development, Incentive Program at any time. The Company will not grant a Development,Agreement to an existing franchisee unless certain conditions are met. The conditions may require significant financial contributions. We currently require that any existing franchisee be in compliance with our system standards. Also, with rare exceptions, the franchisee, its owners, and the franchisee's wholly owned entities must sign a general release in favor of the Company as a condition to entering into a Development Agreement, The standard general release currently in use is attached as Exhibit O. The form ofgeneral release may change over time, for particular transactionSi or for particular states. The conditions under which We may grant a Development Agreement will vary over time, and others may be added. Technology Installation Fees Before your restaurant opens, you must have certain technology systems In place. We Will require that you sign a Master Technology Agreement (“MTA”, Exhibit S) covering certain technology-related services required in the operation of your restaurant, and pay certain fees as set forth in that agreement. You will pay us $6,000 (in most cases) for installation of the point of sale system and $270 for project management for that installation. Additional Fees for Sites to be Developed If you are building a restaurant and would like to locate it within fifteen (15) miles of' an existing Jack in the Box restaurant, you may be required to pay for a Trade Area Survey Analysis to be conducted with respect to each existing restaurant within that radius to estimate potential impact on sales at each such restaurant. The cost of a Trade Area Survey Analysis can range from $3,500 to $7,000, plus all expenses, which may vary considerably. The Company collects this fee from you on behalfof the thirdparty company that conducts the, Trade Area Survey Analysis. Depending on the level of sales transfer from the existing restaurants to the new restaurant predicted, by the Trade Area Survey Analysis, Company may decline or permit you to proceed with your request to develop the new restaurant. If Company permits you to proceed, then you will be required to compensate impacted franchisee owners and may be required to compensate Company for any impacted Company-owned restaurants. The amount of compensation due to franchisees may vary considerably and will depend on the amount of predicted sales transfer. For impacted Company-Owned restaurants, Company may require you to compensate the Company or may reduce any development incentive that you othenvise would have received. If you want to develop a site that we are already in the process of acquiring or developing, you will be required to pay certain fees relating to the site. If you want to develop a site that cannot legally be assigned to you with a release of our obligations, we may sublease the site to you. YOU will be required to reimburse us for all internal overhead or other charges we have incurred in developing the site, including any training costs associated with preparing the site for opening. Those costs will vary considerably based upon time expended by us and the nature of the development services in which we engaged. You will also be required to pay os a separate fee for work we complete toward developing the site. The amount of the fee will vary depending upon (i) the stage of development the site was in When it Was turned over to you, (ii) whether we or you develop the site, and (iii) what services we provide to you during the development process. If the site is developed by you after we acquire it, you will be required to pay a fee of $25,000 plus our out of pocket costs and other expenses and any internal overhead or other charges we incurred in connection with the acquisition investigation and development of the site. None of the costs and fees associated with Company initiated sites are refundable.

Financing

The Company does not regularly offer finaheing in connection with the establishment or operation of new franchised restaurants, in some circumstances, however, the Company may offer short-term (typically 90 days) bridge finandng of Up to eighty percent (80%) of the purchase price of the restaurant if you are not able to secure the financing from other sources at the time of the closing of the transaction. The Company may also offer longer-term mezzanine financing for Up to twenty percent (20%) of the purchase price of the restaurant if you are not able to obtain complete financing from other sources. This mezzanine financing is generally repayable within twenty-four (24) months. The interest rate On the financing is negotiated, but it is typically between 5% and 10%. You are required to make monthly payments on the loan, but there is ho prepayment penalty. If such financing is provided, the Company takes a security interest in all Jack in the Box restaurants subject to such financing. If you default under any such financing arrangement the Company has the right to accelerate the principal and interest under the financing agreement, and demand payment on any other amounts you may owe to the Company or its affiliates (see Exhibit M, Promissory Note). In limited circumstances, the Company may offer build-to-suit arrangements to assist you in meeting construction obligations. In such instances, the Company completes the acquisition and construction of the site, and then leases the land and newly constructed building and improvements, to you. The rent payable by you under the lease is negotiated, as are periodic rent increases. As part of the build-to-suit arrangement, the Company will negotiate with you to allow you the option of eliminating the building rent by making a lump Sum payment to the Company at a future date. In other (limited circumstances, under our current’Development Incentive Program, if you open the restaurant in accordance with the time frames specified in the Development Agreement, and certain other requirements are met, you may also choose an option where the Company will Ipah you $250,000 at zero percent (0%) interest after ground break to be, used toward development costs. The loan must be repaid by crediting 100% of the royalties that would otherwise have been due and payable until the Note is paid in full; and, unless it has already been repaid, is due in full when the developed restaurant is sold of closed. Under this loan agreement, (i) you will be required to sign a Promissory Note'(see Exhibit M); ;(ii) no security interest is required by the Company: (iii) no one other than you, as franchisee, must personally guarantee the debt; and (iv) the debt can be prepaid without any penalty. If you, default on the Promissory Note, you will incur potential liabilities, Including: (i) an accelerated obligation to pay the entire amount due; (ii) obligations to pay the prevailing party’s Court costs and reasonable attorneys' fees incurred in collecting the debt; (iii) liabilities from cross defaults under any Franchise Agreement(s), Lease Agreement(s), or other related agreement(s) between you and the Company; and (iv) termination ofthe franchise. This loan agreement does not require you to waive defenses or other legal rights or bar you from asserting a defense against,the Company. It is not the Company’s practice or intent to sell, assign, or discount to a third party all or part of the loan arrangement. If you are franchising an existing Company-operated restaurant, then: • We may allow you to pay the standard franchise fee in annual installments. • If the restaurant is on real property currently Owned or leased by us,, you may be required to lease or sublease the premises from us. The Lease Agreement is a standard commercial lease under which you pay rent to the Company for use of the premises. The Lease Agreement does not contain any financing terms. (See Exhibit N„ Lease Agreement.) • If there is a significant possibility that the restaurant will close for any reason within a few years, we may, in our sole discretion, allow ypu to pay for the restaurant in two (2) installments, with the second; payment coming due if and when it is clear that the restaurant will remain open for ten (10) years or more. No financing terms are included in any such agreement. We may, upon request, try to help you locate a source offinancial assistance.. We will not charge a fee or receive other compensation for this service. The Franchise Agreement gives us a first-priority security interest in the business assets of your Jack in the Box restaurant in order to secure payment of all ambunts that you may owe to us under the Franchise Agreement and any other,agreements you may have with us .Granting us a security interest in these assets may impair your ability to obtain financing from other potential lenders. In order to facilitate your efforts to obtain financing, we may agree to subordinate our security interest to the security interest of another Tender, but only under certain conditions. We presently offer to act as a broker to purchase certain equipment for franchised Jack in the Bex restaurants, as discussed in the Equipment Brokerage Agreement and the Waster Technology Agreement. (See Exhibits R and S.) If you participate, the Company will charge you a standard eight percent (8%) mark-up on all equipment purchased, with the exception of certain technology equipment; for which there is no mark-up. Payment is due when required by the invoices. The Company reserves the right to take a security interest in any equipment purchased. The duration, terms and conditions of the program are subject to change at any time at'the Company's sole discretion. We may limit or eliminate our equipment broker program at anytime.

Franchisee Revenue and Profit

The table below represents the sales and operating figures of franchise-operated Jack in the Box restaurants in the continental United States (i.e., excludihg Hawaii/Guam) that were in operation for more than 360 days; within the twelvemonth period ending September 30, 2017, and were operated by the same franchjsee(s) for that entire period. The table represents data for 1,683 franchise-operated restaurants, which excludes the information for the following franchise-operated restaurants: eighteen (18) restaurants that opened in 2017; nine (9) restaurants that permanently dosed in 2017; one hundred seventy six (176) restaurants that we sold to franchisees in 2017; thirty nine (39) restaurants that were transferred between franchisees; twenty eight (28) restaurants with insufficient data; and thirty- one (31) restaurants operated in Hawaii/Guam. The restaurants represented in the table comprise approximately 85% of franchised Jack in the Box restaurants as Of September 30, 2017. We have divided the restaurants into five ranges based on sales volume. We have calculated the average sales, median sales and certain expenses of restaufarits in each of the five ranges. The information in the table was prepared using financial information provided to us by franchisees. The franchisees' financial information is not audited and may not have been prepared in accordance with generally accepted accounting practices, however, we believe the information is reliable. The footnotes to the table describe the primary types of items that we ask franchisees to iinclude in each financial category, but we cannot guarantee that all franchisees used these categories in the manner we have requested. Some outlets have earned these amounts. YOur individual results mey differ- There is no assurance you will earn as much. We encourage you to review this material with your attorney or accountant. Written substantiation for the financial performance representation will be made; available to you upon reasonable request. We do not provide any historical operating data for our company-operated Jack in the Box restaurants. Except for the information in this Item 19, we do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees Or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report: it to the franchisor-s management by contacting Chief Legal and Risk Officer, Phillip H. Rudolph, 9330 Balboa Avenue, San Diego, California 92123 (858) 571- 2435, the Federal Trade Commission, and the appropriate state regulatoiy agencies.