REVENUE

9 Months Ended

Jul. 10, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Nature of products and services — We derive revenue from retail sales at Jack in the Box and Del Taco 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 per restaurant for a 20-year term, and generally require that franchisees pay royalty and marketing fees based upon a percentage of gross sales. The agreements also require franchisees to pay technology fees, as well as sourcing fees for Jack in the Box franchise agreements.

Disaggregation of revenue — The following table disaggregates revenue by segment and primary source for the period ended July 10, 2022 (in thousands):

	Quarter						Year-to-date
	Jack in the Box		Del Taco		Total		Jack in the Box		Del Taco		Total
Company restaurant sales	$	100,899	$	114,332	$	215,231	$	315,205	$	171,391	$	486,596
Franchise rental revenues	78,278		1,790		80,068		257,069		2,654		259,723
Franchise royalties	44,291		5,361		49,652		144,872		8,006		152,878
Marketing fees	42,620		4,359		46,979		139,811		6,517		146,328
Technology and sourcing fees	3,548		420		3,968		12,123		625		12,748
Franchise fees and other services	2,340		67		2,407		6,944		93		7,037
Total revenue	$	271,976	$	126,329	$	398,305	$	876,024	$	189,286	$	1,065,310

The following table disaggregates revenue by segment and primary source for the period ended July 4, 2021 (in thousands):

	Quarter						Year-to-date
	Jack in the Box		Del Taco		Total		Jack in the Box		Del Taco		Total
Company restaurant sales	$	91,892	$	—	$	91,892	$	292,132	$	—	$	292,132
Franchise rental revenues	80,598		—		80,598		262,248		—		262,248
Franchise royalties	45,950		—		45,950		146,913		—		146,913
Marketing fees	44,305		—		44,305		142,398		—		142,398
Technology and sourcing fees	4,081		—		4,081		12,977		—		12,977
Franchise fees and other services	2,632		—		2,632		8,548		—		8,548
Total revenue	$	269,458	$	—	$	269,458	$	865,216	$	—	$	865,216

Contract liabilities — Our contract liabilities consist of deferred revenue resulting from initial franchise and development fees received from franchisees for new restaurant openings or new franchise terms, which are 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 10, 2022		July 4, 2021
Deferred franchise and development fees at beginning of period	$	41,520	$	43,541
Changes due to business combinations	6,193		—
Revenue recognized	(4,238)		(4,415)
Additions	3,023		1,718
Deferred franchise and development fees at end of period	$	46,498	$	40,844

As of July 10, 2022, approximately $5.2 million of development fees related to unopened stores are included in deferred revenue. Timing of revenue recognition is dependent upon the timing of store openings and are recognized over the franchise term at the date of opening.

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied as of July 10, 2022 (in thousands):

Remainder of 2022	$	1,202
2023	5,003
2024	4,792
2025	4,555
2026	4,228
Thereafter	21,553
	$	41,333

We have applied the optional exemption, as provided for under ASC 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.