Jack in the Box reports 12.2% same-store sales jump and prepares to expand
Quick-service chain resolves franchisee dispute, hires head of development
Bret Thorn, Nation's Restaurant News
Nov 19, 2020
With a two-year old dispute with franchisees resolved and restaurant profitability up, Jack in the Box is poised to start growing again, CEO Darin Harris told investors Thursday while discussing the San Diego-based quick-service chain’s performance in the fourth quarter, ended Sept. 27.
It was a good quarter. Same-store sales were up by 12.2%, the best performance since 1994, as average checks skyrocketed even as traffic declined.
The company’s net earnings were $37.85 million, or $1.65 per share, compared to $22.1 million, or 86 cents per share in the fourth quarter of 2019, on revenue of $255 million, up from $221.2 million.
Harris, who just joined the chain in June, has been involved since then in negotiating a settlement with the National Jack in the Box Franchise Association, which represents nearly 85% of the approximately 2,000 franchised Jack in the Box restaurants.
The NFA has sued Jack in the Box in late 2018 for, among other things, failure to have a cohesive brand strategy.
The dispute was resolved last week, although terms were not disclosed, which Harris said “clears the path for our existing franchisees to grow, and they’ve expressed that desire to grow.” He said a recent survey of franchisees found that two-thirds of them wanted to expand, and that in fact 27 new restaurants were opened in this fiscal year, “which is more than in the past ten years, despite the pandemic,” he said.
The chain did close 29 underperforming restaurants, however, ending the year with 2,241 restaurants, down from 2,243 at the end of fiscal 2019...