Jack in the Box closing up to 200 locations, may sell Del Taco brand
San Diego-based Jack in the Box announced this week that it will close between 150 and 200 ‘underperforming’ restaurants and will explore selling the Del Taco brand. Photo from Jack in the Box/Facebook
SAN DIEGO – San Diego-based Jack in the Box announced this week that it will close between 150 and 200 “underperforming” restaurants and will explore selling the Del Taco brand.
The company’s “Jack on Track” plan to improve its financial performance will include between 80 to 120 of those closures by the end of 2025. The announcement did not indicate which restaurants would be shuttered, but said most of them “have been in the system for over three decades.”
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The company also indicated it would “significantly reduce” spending on new restaurant development starting next year and would explore “strategic alternatives for the Del Taco brand, including a possible divestiture of the business.” Jack in the Box acquired Del Taco in 2022 for around $585 million.
Recently named CEO Lance Tucker said in a statement, “Our actions today focus on three main areas: addressing our balance sheet to accelerate cash flow and pay down debt, while preserving growth-oriented capital investments related to technology and restaurant reimage; closing underperforming restaurants to position ourselves for consistent net unit growth and competitive unit economics; and, an overall return to simplicity for the Jack in the Box business model and investor story.”
Its multi-faceted “Jack on Track” plan includes a comprehensive series of actions to improve long-term financial performance across its restaurant system, the company said in a press release. These actions will strengthen the company’s balance sheet and demonstrate its commitment to running an asset-light business model — all of which will position Jack in the Box for sustainable growth in the coming years.
As part of the plan, the company has engaged BofA Securities to assist in the process of exploring strategic alternatives for the Del Taco brand, including a possible divestiture of the business.
“In my time thus far as CEO, I have worked quickly with our teams to conclude that Jack in the Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” Tucker said. (With CNS report)
