Jack in the Box

From the pages of Restaurant Franchising
Jack in the Box Focuses on Innovation, Growth, and Refranchising

Jack in the Box franchise

By expanding its namesake brand in new and existing markets and leveraging the strength of its growing franchise community, Jack in the Box Inc. is advancing on its goal to become a national restaurant company. Including 64 new units opened in fiscal 2009, Jack in the Box now operates and franchises 2,212 restaurants. Still, with a presence in just 18 states, Jack in the Box has tremendous growth potential. In addition to its growth strategy, Jack in the Box is also pursuing a strategic initiative to increase its franchising activities. Through new unit development and refranchising, including 194 company units sold in fiscal 2009.

Jack in the Box has increased franchise ownership from 25 percent to 46 percent of its system in just the past four years. The quick-serve chain is on track to be 70 percent to 80 percent franchised by the end of fiscal 2013.

Seeding New Markets

Part of the company’s growth strategy is seeding new markets with company restaurants. In this scenario, Jack in the Box builds the new unit pipeline, then sells the restaurants—including those in the development pipeline—to franchisees.

“It sounds like a company growth strategy, but it really is to facilitate and complement our franchise strategy,” says Senior Vice President and Chief Development Officer Charlie Watson. “And we’re doing that in a number of markets, like Denver, Oklahoma City, and Tulsa.”

Not all new market growth starts with company-owned restaurants. Franchisees recently opened new markets in Colorado Springs, Colorado, and Albuquerque, New Mexico.

Franchisee Profile—New multi-unit operators and long-time Jack in the Box operations staff

Jack in the Box’s franchise community includes experienced multi-unit operators as well as former Jack in the Box employees. In fact, the company encourages its field management to get involved in franchising and even introduces employees to new franchisees seeking operational partners.

Sherman Lewis is a recent example of a new franchisee who partnered with an existing Jack in the Box employee—veteran area coach Opiah Izu. Lewis, who has retail experience operating convenience stores and gas stations, acquired 11 Jack in the Box restaurants in Houston last fall. He relies on Izu to manage the day-to-day operations of their restaurants.

“Uniting financial partners or experienced operators from outside our system with veteran Jack in the Box field personnel is something that we see as good for our employees, good for our franchise strategy, and good for our franchisees,” Watson says.

New Voices

While the employee-to-franchisee path has been a part of the company’s culture for nearly 30 years, recruiting franchisees from outside the brand also adds a fresh point of view, Watson says.

“Franchisees who are new to our system bring valuable experience, enthusiasm, and resources necessary to grow the

Jack in the Box brand in new markets,” he says. “They also provide us with new perspectives from their experience in operating other brands.”

One need look no further than franchisee Terry Shindle to see how the company values the experience of operators from outside its system. Shindle was new to the brand when he acquired his first Jack in the Box restaurant nearly four years ago. He says he was interested in the chain for its growth opportunities, solid management, and operations.

“I like management’s ability to solicit feedback from the franchise community, integrate our collective thought processes, and incorporate some of our ideas into decisions affecting the brand,” Shindle says. “They recognize that we have a voice. And that’s a real positive.”

Investors interested in becoming a Jack in the Box franchisee are encouraged to participate in the company’s regional Executive Briefing and Exchange roundtables, which bring investors together for a day conference.

For more information about franchising opportunities with Jack in the Box, visit jackinthebox.com/franchise