Fast food chains have been in for a bit of a turbulent ride as customers continue to spend less on meals out. Jack in the Box, known for its burgers and its deep fried tacos with cult appeal (just ask Selena Gomez), has been hit pretty hard, recently announcing it will be closing anywhere between 80 to 120 underperforming locations by the end of the year; though a total of 150 to 200 shops will eventually be shuttered.
CNN reports the company revealed this decision earlier this week during a conference call with analysts, saying much of the goal was to dig itself out of a financial pit. Jack in the Box CEO Lance Tucker said in a statement that the closures are “addressing our balance sheet to accelerate cash flow and pay down debt.” The chain hopes to pay off $300 million in debt over the next two years, which could in turn spur some positive growth down the line.
This is an unfortunate turn of events for Jack in the Box because just a few years back we reported the company was poised for an aggressive expansion. It was working on building footprints that were smaller and more drive-thru oriented. It had even invested heavily in Flippy 2, an automated robot cook, to help things move smoothly in the kitchen.
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If you didn’t know this already, Jack in the Box also owns the taco chain Del Taco, which suddenly closed all of its Colorado locations earlier this year. It purchased Del Taco in 2022, but its sales have waned in recent years due to competition from other restaurants, namely Taco Bell. It’s likely Jack in the Box will try and lighten its load by trying to find a new owner for the brand.
CEO Tucker even mentioned it on the call, “I don’t know that (Del Taco’s) results over the next several years are going to meaningfully contribute to Jack’s bottom line.” He continued by saying it “makes sense to move them to another owner.”
Because Jack in the Box is primarily located on the West coast, many of the burger closures will probably be coming from that region. I’ve still never tried it (there’s one coming our way to the Chicago area in just a few months), but if you’re a fan, just keep an eye on your nearest location. If it’s suddenly closed one day, you’ll know exactly what happened.
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