Revenue

9 Months Ended

Jul. 05, 2020

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

Nature of products and services — We derive revenue from retail sales at Jack in the Box company-operated restaurants and rental revenue, royalties, advertising, and franchise and other fees from franchise-operated restaurants.

Our franchise arrangements generally provide for an initial franchise fee of $50,000 per restaurant and generally require that franchisees pay royalty and marketing fees at 5% of gross sales. The agreement also requires franchisees to pay sourcing, technology and other miscellaneous fees.

Disaggregation of revenue — The following table disaggregates revenue by primary source (in thousands):

	Quarter				Year-to-date
	July 5, 2020		July 7, 2019		July 5, 2020		July 7, 2019
Sources of revenue:
Company restaurant sales	$	82,444	$	78,434	$	262,188	$	257,948
Franchise rental revenues	76,021		63,359		241,990		208,895
Franchise royalties	41,537		38,752		127,829		125,407
Marketing fees	36,757		37,269		116,142		121,078
Technology and sourcing fees	3,814		3,117		12,316		10,111
Franchise fees and other services	1,702		1,428		5,640		5,433
Total revenue	$	242,275	$	222,359	$	766,105	$	728,872

Contract liabilities — Our contract liabilities consist of deferred revenue resulting from initial fees received from franchisees for new restaurant openings or new franchise terms, which are generally recognized over the franchise term. We classify these contract liabilities as “Accrued liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets.

A summary of significant changes in our contract liabilities is presented below (in thousands):

	Year-to-date
	July 5, 2020		July 7, 2019
Deferred franchise fees at beginning of period	$	46,272	$	50,018
Revenue recognized	(4,249)		(3,953)
Additions	1,923		970
Deferred franchise fees at end of period	$	43,946	$	47,035

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied as of July 5, 2020 (in thousands):

Remainder of 2020	$	1,136
2021	4,947
2022	4,742
2023	4,590
2024	4,398
Thereafter	24,133
	$	43,946

We have applied the optional exemption, as provided for under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, which allows us to not disclose the transaction price allocated to unsatisfied performance obligations when the transaction price is a sales-based royalty.