Jack in the Box, the popular fast-food chain headquartered in Southern California, revealed on April 23 that it will shut down 150 to 200 underperforming restaurants across the United States. The closures are part of a strategic plan aimed at streamlining operations and refocusing the brand.
The company’s newly appointed CEO, Lance Tucker, introduced the ‘JACK on Track’ initiative, which includes a series of measures designed to strengthen the company’s financial position. These measures include the sale of select real estate assets, halting dividend payouts, reducing overall debt, and closing down struggling locations. With a presence of over 2,200 locations nationwide, more than 900 of Jack in the Box’s restaurants are based in California.
Refining the Business Model
Tucker emphasized that the goal of the plan is to return the brand to a simpler, more efficient business model. The shift focuses on transitioning Jack in the Box to an “asset-light” structure, where franchising plays a larger role in operations. Under this model, Jack in the Box will depend more on franchised restaurants rather than owning and managing its own locations, effectively reducing risks and operational costs. In return, the company will generate income through franchise royalties and fees.
As part of this transition, the company plans to close between 80 and 120 restaurants by the end of 2025, with additional closures occurring in the future as underperforming locations are phased out. Many of these closures will affect restaurants that have been part of the brand for over 30 years.
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Potential Sale of Del Taco Brand
In addition to the restaurant closures, Jack in the Box is also considering the future of its Del Taco brand, which it acquired in 2022. The company has stated it is exploring various options for Del Taco, including the possibility of selling the chain. This move comes as part of Jack in the Box’s broader strategy to refocus on its core operations and ensure long-term growth.
Enhancements to Existing Locations
Alongside the closures and potential sale of Del Taco, Jack in the Box is committed to improving the remaining locations in its portfolio. The company plans to invest in updates and improvements to its existing restaurants to enhance customer experience and strengthen the brand’s presence in key markets.
