Jack in the Box Axing Up to 200 Locales

Jack in the Box Inc. (San Diego) has unveiled plans to close between 150-200 underperforming restaurants as part of a “Jack on Track” plan to improve its long-term financial performance, strengthen its balance sheet and demonstrate its commitment to running an asset-light business model . As part of the plan, the company has hired BofA Securities to help explore strategic alternatives for its Del Taco brand, including a possible sale 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,” said Lance Tucker, who was named to the chain’s top spot on March 31. “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.”

The company noted that most of the outlets slated for closure have been in the system for over three decades. The closings will be done in two phases: 80-120 restaurant between now and the end of the year, with the remainder taking place based upon their respective franchise-termination dates.

Those closures notwithstanding, this year the burger chain plans to open 35-40 new restaurants.

Jack in the Box currently has 2200 restaurants across 22 states, while Del Taco consists of about 600 restaurants across 17 states.