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Jack in the Box National Franchisee Association Files Breach of Contract Against Franchisor

Franchisees Focus on Use of Marketing Funds and Relationship Issues Significantly Impacting the Business Model

The Jack in the Box National Franchisee Association (NFA) today announced that it has filed a breach of contract and implied covenant of good faith and fair dealing lawsuit against Jack in the Box (NASDAQ:JACK) in Los Angeles, California. The lawsuit details Jack in the Box’s failure to perform its contractual obligations, resulting in a negative impact on its franchisee financial business model as it pertains to the rights assured to franchisees under their current franchise agreements.

The lawsuit cites the following:

  • Breach of a 1999 settlement agreement with the NFA by refusing to provide franchisees with an audit of the marketing fund and documentation detailing the income and expenditures of the fund as required therein.
  • Violation of the good faith and fair dealings provisions of the franchise agreements by Jack in the Box in inappropriately requiring franchisees to undertake major remodeling programs on stores where roofing and ...

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