JACK IN THE BOX INC

1. BASIS OF PRESENTATION

Nature of operations — Jack in the Box Inc. (the “Company”), together with its consolidated subsidiaries, develops, operates, and franchises quick-service restaurants under the Jack in the Box®restaurant brand.

As of July 5, 2026, there were 149 company-operated and 1,966 franchise-operated Jack in the Box restaurants.

References to the Company throughout these notes to condensed consolidated financial statements are made using the first person notations of “we,” “us” and “our.”

Basis of presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

These financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2025 (“2025 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our 2025 Form 10-K.

On October 15, 2025, the Company entered into an agreement to sell Del Taco Holdings Inc., a Delaware corporation (“Del Taco”), which owns and operates the Company’s Del Taco restaurant operations, to Yadav Enterprises, Inc., a California corporation (“Buyer”) and Anil Yadav (“Buyer Guarantor”), which was completed on December 22, 2025. For all periods presented in our condensed consolidated statements of earnings (loss), all sales, costs, expenses and income taxes attributable to Del Taco, have been aggregated under the caption “Losses from discontinued operations, net of income taxes.” Cash flows used in or provided by Del Taco operations have been aggregated in the condensed consolidated statement of cash flows as part of discontinued operations. Prior year results have been recast to conform with the current presentation. Refer to Note 4, Discontinued Operations, for additional information.

In our opinion, all adjustments considered necessary for a fair presentation of financial condition and results of operations for these interim periods have been included. Operating results for one interim period are not necessarily indicative of the results for any other interim period or for the full year.

Reclassifications and adjustments— Certain amounts in the prior periods’ condensed consolidated financial statements have been reclassified due to the sale of Del Taco. See Note 4, Discontinued Operations, for further information regarding this sale and the resulting prior year reclassifications.

Fiscal year — The Company’s fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Both fiscal years 2026 and 2025 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2026 and 2025 refer to the 12 weeks (“quarter”) and 40 weeks (“year-to-date”) ended July 5, 2026 and July 6, 2025, respectively, unless otherwise indicated.

Use of estimates — In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates.

Advertising costs — The Company administers a marketing fund that includes contractual contributions. In 2026 and 2025, marketing fund contributions from Jack in the Box franchise and company-operated restaurants were approximately 5.0% of sales.

Total contributions made by the Company and other marketing activities are included in “Selling, general and administrative expenses” in the accompanying condensed consolidated statements of earnings (loss). For the year-to-date periods in 2026 and 2025, advertising costs were $18.3 million and $17.3 million, respectively. Year-to-date incremental contributions made by the Company in 2026 and 2025 were $0.6 million and $0.4 million, respectively.

Allowance for credit losses— The Company closely monitors the financial condition of our franchisees and estimates the allowance for credit losses based on the lifetime expected loss on receivables. These estimates are based on historical collection experience with our franchisees as well as other factors, including current market conditions and events. Credit quality is monitored through the timing of payments compared to predefined aging criteria and known facts regarding the financial condition of the franchisee or customer. While the Company uses the best information available, ultimate recovery depends on future economic conditions and other factors beyond the Company’s control. Account balances are charged off against the allowance after recovery efforts have ceased. The Company’s allowance for doubtful accounts has not historically been material.

The following table summarizes the activity in the allowance for doubtful accounts(in thousands):

Recent accounting pronouncements — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis with the option to apply the standard retrospectively. The Company will adopt this pronouncement on a prospective basis in its Form 10-K for fiscal year ended September 27, 2026, and does not expect this pronouncement to have a significant impact.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. Additionally, companies will need to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 should be applied prospectively to financial statements issued for reporting periods beginning after the effective date, but entities may elect to apply the ASU retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

2. REVENUE

Nature of products and services— The Company derives 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 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.

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

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):

As of July 5, 2026, approximately $3.9 million of development fees related to unopened restaurants are included in deferred revenue. Timing of revenue recognition for development fees related to unopened restaurants is dependent upon the timing of restaurant 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 5, 2026(in thousands):

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.

3. ASSETS HELD FOR SALE

Assets held for sale— Assets classified as held for sale on our condensed consolidated balance sheets as of July 5, 2026 and September 28, 2025 have carrying amounts of $14.5 million and $621.0 million, respectively. As of July 5, 2026, these amounts relate to operating restaurants and other property which we intend to sell to franchisees and/or sell and leaseback with a third party, and closed restaurant properties which we are marketing for sale. As of September 28, 2025, $602.7 million relates to Del Taco which is presented as held for sale. Refer to Note 4, Discontinued Operations, for additional information on assets and liabilities held for sale.

4. DISCONTINUED OPERATIONS

Del Taco— On October 15, 2025, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the Buyer and Buyer Guarantor to sell to Buyer all of the issued and outstanding equity interests of Del Taco, which owns and operates the Company’s Del Taco restaurant operations, for an aggregate purchase price of $115.0 million in cash, subject to certain closing cash, working capital, debt and transaction expense adjustments. The transaction closed on December 22, 2025 (the “Del Taco Sale”). The transaction documents include an indemnification provision pursuant to which the Company may be required to indemnify Del Taco for certain losses incurred withinone-year following the transaction closing on December 22, 2025, but only with respect to specifically identified matters, and subject to an aggregate cap of $10.0 million.

As the Del Taco Sale represents a strategic shift that will have a major effect on our operations and financial results, the Del Taco results are classified as discontinued operations in our condensed consolidated statements of earnings (loss) and our condensed consolidated statements of cash flows for all periods presented. Prior year results have been recast to conform with the current year presentation.

The Company had entered into a Transition Services Agreement (“TSA”) pursuant to which the Buyer received certain services to enable it to operate the Del Taco business after the closing of the Del Taco Sale. The services included information technology, finance and accounting, human resources, supply chain and other corporate support services. The TSA period concluded during the second quarter 2026. The Company recorded $1.5 million in the year-to-date period of 2026 related to the TSA as a reduction of selling, general and administrative expenses in the condensed consolidated statements of earnings (loss). On March 13, 2026, the Company filed a complaint against the buyer in the Delaware Court of Chancery seeking to recover unpaid service fees under a now terminated TSA and to require the buyer to comply with insurance collateral and deductible assumption requirements in the Purchase Agreement for workers’ compensation cases related to the Del Taco business.

The following table summarizes the Del Taco results for each period(in thousands, except per share data):

(1)Del Taco operating results include only twelve weeks of activity through the sale date on December 22, 2025.

(2)Selling, general and administrative expenses presented in the table above include corporate costs directly in support of Del Taco operations. All other corporate costs were classified in results of continuing operations.

(3)Depreciation and amortization ceased upon classification of the Del Taco assets as held for sale during the first quarter of 2026.

(4)Transaction-related costs are comprised primarily of professional fees for accounting, legal, and IT, which were not contingent fees included in the loss on sale calculation.

(5)Income tax benefit in 2026 is primarily due to utilization of capital losses from the Del Taco sale, net of a valuation allowance against excess capital loss carryforwards expiring in fiscal 2031.

The following is a reconciliation of the loss recorded for the Del Taco sale (in thousands):

(1)The proceeds received from the Del Taco Sale include working capital adjustments outlined in the Purchase Agreement.

(2)Costs directly incurred as a result of the Del Taco Sale, including investment bank fees and employee transaction awards.

The assets being sold and liabilities being assumed by the Buyer were classified as held-for-sale during the first quarter of 2026. As such, prior year balances have been recast to conform with this presentation. Upon classification of the Del Taco assets as held for sale, the assets were no longer depreciated. Proceeds from the Del Taco Sale have been presented in the condensed consolidated statement of cash flows within cash provided by discontinued operations in investing activities.

The following table summarizes the major categories of assets and liabilities classified as held for sale in our condensed consolidated balance sheet as of September 28, 2025 and acquired in the Del Taco Sale(in thousands):

(1)Reflects deferred income tax liabilities for Del Taco, which were netted against the Jack in the Box deferred income tax assets in other assets, net, on our condensed consolidated balance sheets.

(2)The current assets held for sale on the condensed consolidated balance sheet as of September 28, 2025 includes Jack in the Box assets held for sale of $18.3 million.

5. LEASES

Nature of leases — The Company owns restaurant sites and also leases restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance, and common area maintenance, which are excluded from the measurement of the lease liability.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees in connection with refranchising transactions. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying condensed consolidated statements of earnings (loss), and the related expenses are presented in “Franchise occupancy expenses.”

The following table presents rental income for the periods presented (in thousands):

(1)Includes closed restaurant properties included in “Other operating (income) expense, net,” in our condensed consolidated statements of earnings (loss).

6. FAIR VALUE MEASUREMENTS

Financial assets and liabilities —The following table presents our financial assets and liabilities measured at fair value on a recurring basis (in thousands):

(1)The Company maintains an unfunded defined contribution plan for key executives and other members of management. The fair value of this obligation is based on the closing market prices of the participants’ elected investments. The obligation is included in “Accrued liabilities” and “Other long-term liabilities” on our condensed consolidated balance sheets.

The Company did not have any transfers in or out of Level 1, 2 or 3 for its financial liabilities.

The following table presents the carrying value and estimated fair value of our Class A-2 Notes as of July 5, 2026 and September 28, 2025 (in thousands):

The fair value of the Class A-2 Notes was estimated using Level 2 inputs based on quoted market prices in markets that are not considered active markets. On both January 9, 2026 and June 10, 2026, the Company made a prepayment on its Series 2019-1 Class A-2-II Notes. On June 23 2026, the Company issued $500.0 million of Series 2026-1 Fixed Rate Senior Secured Notes, Class A-2 (the “2026 Class A-2 Notes”) and used the proceeds to pay down the remainder of the Series 2019-1 Class A-2-II Notes and a portion of the 2022-1 Class A-2-I Notes. Refer also to Note 7, Indebtedness, for additional information on the repayment and refinancing transactions.

Non-financial assets and liabilities — The Company’s non-financial instruments, which primarily consist of property and equipment, operating lease right-of-use assets, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on an annual basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values are written down to fair value.

7. INDEBTEDNESS

Long-term debt obligations consist of the following (in thousands):

On January 9, 2026, the Company prepaid $105.0 million of its Series 2019-1 Class A-2-II Notes using proceeds from the Del Taco Sale. On June 10, 2026, the Company prepaid an additional $110.0 million of its existing Series 2019-1 Class A-2-II Notes using proceeds from the withdrawal of excess COLI funding as well as cash on hand.

Securitization refinancing transaction —On June 23, 2026, Jack in the Box Funding, LLC (the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of the Company, completed its financing transaction and issued $500.0 million of its 2026 Class A-2 Notes. In connection with the issuance of the 2026 Class A-2 Notes, the Master Issuer also entered into a revolving financing facility of Series 2026-1 Variable Funding Senior Secured Notes, Class A-1 (the “Variable Funding Notes”), which allows for the drawing of up to $150.0 million under the Variable Funding Notes, which include certain instruments, including a letter of credit facility. The 2026 Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “2026 Notes.” The 2026 Notes were issued in a privately placed securitization transaction and are secured on substantially the same basis as the Company's existing securitized notes.

Net proceeds from the sale of the 2026 Class A-2 Notes were used to repay in full the remaining $46.1 million in aggregate outstanding principal amount of the Company’s Series 2019-1 Class A-2-II Notes, together with unpaid interest. The Company also paid $479.9 million of its Series 2022-1 Class A-2-I Notes, and a portion of its unpaid interest. As a result of the refinancing transaction, the Company recorded a loss on the early extinguishment of debt of $1.3 million during the quarter which was comprised of the write-off of certain deferred financing costs and is presented in “Interest expense, net” in the condensed consolidated statement of earnings (loss).

In connection with the 2026 Class A-2 Notes, the Company capitalized $11.7 million of debt issuance costs, which are being amortized as interest expense utilizing the effective interest rate method through the May 2031 Anticipated Repayment Date. There were also $1.4 million of debt issuance costs related to our Variable Funding Notes, which are presented within “Other assets, net” and are being amortized using the straight-line method through May 2031.

2026 Class A-2 Notes —Interest and principal payments on the 2026 Class A-2 Notes are payable on a quarterly basis. Similar to our 2019 and 2022 Notes, the requirement to make quarterly principal payments is subject to certain financial conditions set forth in the Indenture. Quarterly principal payments may be suspended when the HoldCo Leverage Ratio, which is a measure of outstanding debt to earnings before interest, taxes, depreciation, and amortization, adjusted for certain items (as defined in the Indenture), is less than or equal to 5.0 x. Exceeding the leverage ratio of 5.0 x does not violate any covenant related to the Notes. The Company has a leverage ratio of greater than 5.0 x and, accordingly, is making the scheduled amortization payments on its 2019, 2022 and 2026 Notes. The final maturity date of the 2026 Class A-2 Notes is May 2056, but, unless earlier prepaid to the extent permitted under the Indenture, the Anticipated Repayment Date of the Class A-2 Notes is May 2031. The Anticipated Repayment Date of the 2019-1 Class A-2-III Notes is August 2029, and the 2022-1 Class A-2-I Notes and the 2022-1 Class

A-2-II Notes are February 2027 and February 2032, respectively. If the Master Issuer has not repaid or redeemed the Notes prior to their respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture.

The Company may also be required to make additional prepayments of principal on the 2026 Class A-2 Notes when the Senior ABS Leverage Ratio, as defined in the Indenture, is greater than 5.25 x. As of July 5, 2026, the Senior ABS Leverage Ratio is greater than 5.25 x and as a result, cash sweeping prepayments of $23.3 million are included in “Current maturities of long-term debt” in our condensed consolidated balance sheets.

Variable Funding Notes — In connection with the issuance of the Variable Funding Notes and its entry into the Variable Funding Note Purchase Agreement, the Master Issuer terminated the commitments with respect to its existing $150 million Series 2022-1 Variable Funding Notes. As of July 5, 2026, $56.4 million of letters of credit were outstanding against the Variable Funding Notes, which relate primarily to interest reserves required under the Indenture. During the third quarter of 2026, we borrowed $39.0 million under the Variable Funding Notes. As of July 5, 2026, unused borrowing capacity under our Variable Funding Notes was $54.6 million.

Maturities of long-term debt —Assuming repayment by the Anticipated Repayment Dates and based on an estimate of future leverage ratios as of July 5, 2026, principal payments on our long-term debt outstanding at July 5, 2026 for each of the next five fiscal years and thereafter are as follows (in thousands):

The maturities table above assumes that the HoldCo Leverage Ratio will remain above 5.0x for the duration, and that the Senior ABS Leverage Ratio would remain above 5.25x but below 6.25x through February 2028.

8. OTHER OPERATING (INCOME) EXPENSE, NET

Other operating (income) expense, net, in the accompanying condensed consolidated statements of earnings (loss) is comprised of the following (in thousands):

(1)Restructuring, integration and other includes proxy contest fees, restructuring that is not deemed discontinued operations, and other consulting fees for discrete project-based strategic initiatives.

(2)Costs of closed restaurants and other includes ongoing costs associated with closed restaurants and cancelled project costs.

(3)Impairment charges are related to underperforming and closed restaurant properties.

(4)Disposals of property and equipment includes gains on the sale of real estate of $9.6 million in the quarter and $18.9 million year-to-date in the current year.

9. SEGMENT REPORTING

The Company’s principal business consists of developing, operating and franchising our Jack in the Box restaurant brand. Our chief operating decision maker (“CODM”) is our Interim Chief Executive Officer, Mark King. Following the sale of Del Taco in December 2025, the Company is considered to have onlyone reportable operating segment. The segment reporting structure reflects the Company’s current management structure, internal reporting method and financial information used in deciding how to allocate Company resources.

The Company measures and evaluates its segment based on segment revenues and segment profit. The reportable segment excludes certain general and administrative functions such as accounting/finance, human resources, legal, and certain unallocated costs such as share-based compensation. The Company’s measure of segment profit also excludes the following items: depreciation and amortization, net gains on company-owned life insurance (“COLI”), net other operating (income) expenses, net other pension and post-retirement expenses and net interest expense.

The following table provides information related to our operating segments in each period (in thousands):

(1)Other segment expense represents selling, general, and administrative costs, pre-opening costs, and certain amortization expenses attributable to the identified operating segments. Third quarter and year-to-date 2026 includes the reversal of certain litigation expenses attributable to the operating segment.

The Company does not evaluate, manage or measure performance of segments using assets, pension or post-retirement expense, interest income and expense, or income tax information; accordingly, this information by segment is not prepared or disclosed.

10. INCOME TAXES

For the third quarter of and year-to-date fiscal year 2026, the Company recorded income tax expense of $12.3 million and $24.0 million, respectively, resulting in effective tax rates of 36.9% and 33.3%, respectively. The effective tax rate for such periods differed from the U.S. statutory tax rate primarily due to the establishment of valuation allowance on cumulative interest deduction limitations from current and prior fiscal years and the nondeductible component of share-based compensation partially offset by a favorable state refund claim settlement and nontaxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans.

For the third quarter of and year-to-date fiscal year 2025, the Company recorded income tax expense of $6.0 million and $27.3 million, respectively, resulting in effective tax rates of 20.9% and 26.8%, respectively. The effective tax rate for such periods differed from the U.S. statutory tax rate primarily due to the nondeductible component of share-based compensation largely offset by nontaxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans.

11. STOCKHOLDERS EQUITY AND REPURCHASES OF COMMON STOCK

Repurchases of common stock — The Company didnot repurchase any shares of its common stock in the current year. As of July 5, 2026, there was $175.0 million remaining under share repurchase programs authorized by the Board of Directors which does not expire.

Stockholder Rights Plan — On July 1, 2025, the Board of Directors adopted a limited-duration stockholder rights plan and declared a dividend of one right (a “Right”) for each outstanding share of the Company’s common stock held of record at the close of business on July 14, 2025. The Rights will generally become exercisable if a person or group acquires beneficial ownership of 12.5% or more of the outstanding shares of the Company’s common stock, subject to certain exceptions (including an exception for existing persons who own in excess of such triggering percentage and do not acquire additional shares of the Company’s common stock). If the Rights become exercisable, all holders of Rights (other than the triggering person or group) will be entitled to purchase shares of the Company’s common stock at a 50% discount to the then-current market price or the Company may exchange each Right held by such holders for one share of the Company’s common stock. The terms of the Rights are set forth in the Stockholder Protection Rights Agreement, dated as of July 1, 2025, by and between the Company and Computershare Trust Company, N.A., as rights agent (the “Rights Agreement”), as amended by Amendment No. 1 to the Stockholder Protection Rights Agreement, dated as of September 8, 2025. On February 27, 2026, the Company’s shareholders ratified the adoption of the Rights Agreement, which, in accordance with its terms, extended the expiration time of the Rights Agreement. The Rights will expire on the close of business on July 1, 2028, unless the Rights are earlier redeemed, or exchanged, or the Rights Agreement is terminated, by the Board of Directors or the Company consummates a merger that does not constitute a Flip-over Transaction or Event (as defined in the Rights Agreement).

12. WEIGHTED AVERAGE SHARES OUTSTANDING

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding (in thousands):

13. COMMITMENTS AND CONTINGENCIES

Legal matters — The Company assesses contingencies, including litigation contingencies, to determine the degree of probability and range of possible loss for potential accrual in our financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of July 5, 2026, the Company had accruals of $10.6 million for all of its legal matters in aggregate, presented within “Accrued liabilities” on our condensed consolidated balance sheet. Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. The Company regularly reviews contingencies to determine the adequacy of the accruals and related disclosures. The ultimate amount of loss may differ from these estimates. Any estimate is not an indication of expected loss, if any, or of the Company’s maximum possible loss exposure and the ultimate amount of loss may differ materially from these estimates in the near term.

Gessele v. Jack in the Box Inc. — In August 2010, five former Jack in the Box employees instituted litigation in federal court in Oregon alleging claims under the federal Fair Labor Standards Act and Oregon wage and hour laws. The plaintiffs alleged that Jack in the Box failed to pay non-exempt employees for certain meal breaks and improperly made payroll deductions for shoe purchases and for workers’ compensation expenses, and later added additional claims relating to timing of final pay and related wage and hour claims involving employees of a franchisee. In 2016, the court dismissed the federal claims and those relating to franchise employees. In June 2017, the court granted class certification with respect to state law claims of improper deductions and late payment of final wages. The parties participated in a voluntary mediation on March 16, 2020, but the matter did not settle. On October 24, 2022, a jury awarded plaintiffs approximately $6.4 million in damages and penalties. On November 25, 2025, the Ninth Circuit Court of Appeals issued an opinion which was then amended on April 20, 2026, remanding several issues back to the trial court for further proceedings. As a result, during the quarter, the Company reversed a portion of its prior charges and is now maintaining an estimated liability associated with the portion of the prior verdict that was not vacated by the Ninth Circuit opinion, inclusive of related pre-judgment and post-judgment interest, along with additional amounts associated with this matter. This amount is included within “Accrued liabilities” on our condensed consolidated balance sheet as of July 5, 2026. Company anticipates further proceedings, including potential additional appellate proceedings, following trial or other disposition of the remanded matters. Due to the procedural posture of the remanded matters and the uncertainties inherent in litigation, the Company is unable to predict the ultimate outcome or estimate the amount of any further loss, if any.

J&D Restaurant Group— On April 17, 2019, the trustee for a bankrupt former franchisee filed a complaint generally alleging the Company wrongfully terminated the franchise agreements and unreasonably deniedtwo prospective purchasers the former franchisee presented. The parties participated in a mediation in April 2021, and again in December 2022, but the matter did not settle. The trial commenced on January 9, 2023, and on February 8, 2023, the jury returned a verdict finding the Company had not breached any contracts in terminating the franchise agreements or denying the proposed buyers. However, while the jury also found the Company had not violated the California Unfair Practices Act, it found for the plaintiff on the claim for breach of implied covenant of good faith and fair dealing, and awarded $8.0 million in damages. On May 9, 2023, the court granted the Company’s post-trial motion, overturning the jury verdict and ordering the plaintiff take nothing on its claims. As a result, the Company reversed the prior $8.0 million accrual. The Plaintiff has appealed the trial court’s post-trial rulings. As part of the appeal, the parties participated in a mediation on March 18, 2025, but the matter did not settle. On October 9, 2025, the appellate court issued an opinion affirming the trial court’s take nothing judgment in favor of the Company. On February 4, 2026, the plaintiff filed a petition for the matter to be reviewed by the Texas Supreme Court. On March 13, 2026, the Texas Supreme Court denied the plaintiff’s petition for review. As a result of this denial, during the second quarter of 2026, the Company reversed the accrual associated with this claim.

Del Taco — The Del Taco Sale transaction documents include an indemnification provision pursuant to which the Company may be required to indemnify Del Taco for certain losses incurred within one year following the transaction closing on December 22, 2025, but only with respect to specifically identified matters, and subject to an aggregate cap of $10.0 million. Additionally, on March 13, 2026, the Company filed a complaint against the buyer in the Delaware Court of Chancery seeking to recover unpaid service fees under a now terminated TSA and to require the buyer to comply with insurance collateral and deductible assumption requirements in the Purchase Agreement for workers’ compensation cases related to the Del Taco business. Refer to Note 4, Discontinued Operations, for additional information on the Del Taco sale.

Other legal matters — In addition to the matters described above, we are subject to normal and routine litigation brought by former or current employees, customers, franchisees, vendors, landlords, shareholders, or others. We intend to defend ourselves in any such matters. Some of these matters may be covered, at least in part, by insurance or other third-party indemnity obligation. We record receivables from third party insurers when recovery has been determined to be probable.

Lease guarantees — We remain contingently liable for certain leases relating to our former Qdoba business which we sold in fiscal 2018. Under the Qdoba Purchase Agreement, the buyer has indemnified the Company of all claims related to these guarantees. As of July 5, 2026, the maximum potential liability of future undiscounted payments under these leases is approximately $22.9 million. The lease terms extend for a maximum of approximately 12 more years and we would remain a guarantor of the leases in the event the leases are extended for any established renewal periods. In the event of default, we believe the exposure is limited due to contractual protections and recourse available in the lease agreements, as well as the Qdoba Purchase Agreement, including a requirement of the landlord to mitigate damages by re-letting the properties in default, and indemnity from the Buyer. The Company has not recorded a liability for these guarantees as we believe the likelihood of making any future payments is remote.

Franchisee guarantees —The Company has an agreement for a financing structure with a lender to allow them to limit their exposure to risk, while they service franchise-owned locations. The agreement with the Company is to remain in effect until all franchisee obligations are paid in full. As of July 5, 2026, and in accordance with that arrangement, $2.0 million was held within “Restricted cash” on our condensed consolidated balance sheet, and the Company has an additional unfunded obligation of less than $0.1 million. The Company has not recorded a liability for these unfunded obligations as we believe the likelihood of making any future payments is remote.

14. SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION(in thousands)

(1)Fiscal year 2026 includes an $8.3 million state refund claim settlement.

15. SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION(in thousands)

(1)Income tax receivables increased due to refunds expected from carrying back a portion of the capital loss generated from the sale of Del Taco.

(2)The Company withdrew excess COLI funding, which was used to prepay a portion of 2019-1 Class A-2-II Notes in the third quarter of 2026. Refer to Note 7, Indebtedness, for additional information on the repayment.