Jack in the Box Plants the Seeds for Refranchising

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Jack in the Box Inc. disclosed the details of two refranchising transactions that were included in the company’s fourth-quarter operating results, which were announced on November 19.

On August 20, the company sold to RRH-Austin 35 Jack in the Box restaurants in Austin, Texas, and on September 24, the company sold to JIB QSR Oklahoma seven Jack in the Box restaurants in its Oklahoma City market.

Proceeds related to the sale of these 42 restaurants totaled approximately $19.1 million.

Oklahoma City is one of five markets in the Jack in the Box system “seeded” with company-operated locations.

“By pursuing an innovative ‘seeding’ strategy and taking a collaborative approach to new market development, Jack in the Box is able to secure great locations, open restaurants with the full support of our marketing and operations teams, and establish a sales history and cash flows that could help a franchisee secure the necessary financing to continue expanding in the market,” says Grant Kreutzer, director of franchise licensing & recruitment for Jack in the Box.

Including these locations in Austin and Oklahoma City, Jack in the Box refranchised 97 restaurants in fiscal 2012.

The transactions reflect the company’s strategic initiative to expand franchising and franchise ownership in the Jack in the Box system.

The Jack in the Box system is now nearly 76 percent franchised versus 25 percent in 2005.

The company is currently seeking experienced, multiunit restaurant operators to refranchise other company markets in the Southeast and Midwest.

In Tulsa, Oklahoma; Kansas City; Indianapolis, Indiana; and Cincinnati, Ohio, franchisees can acquire up to 10 recently opened restaurants, then further develop the market with royalty and franchise fee incentives.