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REVENUE
 6 Months Ended
Apr. 16, 2023
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Nature of products and services — The Company derives 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 quarter ended April 16, 2023 (in thousands):
QuarterYear-to-date
Jack in the BoxDel TacoTotalJack in the BoxDel TacoTotal
Company restaurant sales$95,489 $107,115 $202,604 $221,631 $251,164 $472,795 
Franchise rental revenues80,910 2,610 83,520 187,006 5,344 192,350 
Franchise royalties46,401 5,657 52,058 113,970 12,591 126,561 
Marketing fees46,486 4,609 51,095 106,830 10,263 117,093 
Technology and sourcing fees3,875 668 4,543 8,844 1,386 10,230 
Franchise fees and other services1,671 253 1,924 3,468 343 3,811 
Total revenue$274,832 $120,912 $395,744 $641,749 $281,091 $922,840 
The following table disaggregates revenue by segment and primary source for the quarter ended April 17, 2022 (in thousands):
QuarterYear-to-date
Jack in the BoxDel TacoTotalJack in the BoxDel TacoTotal
Company restaurant sales$94,250 $57,059 $151,309 $214,306 $57,059 $271,365 
Franchise rental revenues75,692 864 76,556 178,791 864 179,655 
Franchise royalties42,933 2,645 45,578 100,581 2,645 103,226 
Marketing fees41,390 2,158 43,548 97,191 2,158 99,349 
Technology and sourcing fees3,575 205 3,780 8,575 205 8,780 
Franchise fees and other services1,497 26 1,523 4,604 26 4,630 
Total revenue$259,337 $62,957 $322,294 $604,048 $62,957 $667,005 
In October 2022, a Jack in the Box franchise operator paid the Company $7.3 million in order to sell his restaurants to a new franchisee at the current standard royalty rate, which is lower than the royalty rate in the existing franchise agreements. The payment represented the difference between the existing royalty rate and the new royalty rate based on projected future sales for the remaining term of the existing agreements. The payment is non-refundable and not subject to any adjustments based on actual future sales. The Company determined the transaction represented the termination of the existing agreement rather than the transfer of an agreement between franchisees. As such, the $7.3 million was recognized in franchise royalty revenue during the first quarter of 2023.
Contract liabilities — 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. The Company classifies these contract liabilities as “Accrued liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets.
A summary of significant changes in contract liabilities is presented below (in thousands):
Year-to-date
April 16,
2023		April 17,
2022
Deferred franchise and development fees at beginning of period$46,449 $41,520 
Changes due to business combinations— 6,193 
Revenue recognized (2,934)(2,995)
Additions 3,332 2,379 
Deferred franchise and development fees at end of period$46,847 $47,097 
As of April 16, 2023, approximately $6.6 million of development fees related to unopened stores are included in deferred revenue. Timing of revenue recognition for development fees related to unopened stores 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 April 16, 2023 (in thousands):
Remainder of 2023$2,359 
20244,924 
20254,688 
20264,361 
20274,004 
Thereafter19,892 
$40,228 
The Company has 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.