Revenue

12 Months Ended

Sep. 27, 2020

Revenue from Contract with Customer [Abstract]

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 support and other miscellaneous fees.

Disaggregation of revenue — The following table disaggregates revenue by primary source for the fiscal years ended September 27, 2020 and September 29, 2019 (in thousands):


	2020		2019
Sources of revenue:
Company restaurant sales	$	348,987	$	336,807
Franchise rental revenues	320,647		272,815
Franchise royalties	171,407		163,047
Marketing fees	158,258		157,969
Technology and sourcing fees	15,295		12,705
Franchise fees and other services	6,912		6,764
Total revenue	$	1,021,506	$	950,107

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 within “Accrued liabilities” and “Other long-term liabilities” in our consolidated balance sheets.

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


	2020		2019
Deferred franchise fees at beginning of period	$	46,273	$	50,018
Revenue recognized during the period	(5,440)		(5,173)
Additions during the period	2,708		1,428
Deferred franchise fees at end of period	$	43,541	$	46,273

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period (in thousands):


2021	$	4,934
2022	4,828
2023	4,628
2024	4,436
2025	4,208
Thereafter	20,507
	$	43,541

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.