Michael Norwich says no one has more invested in the Jack in the Box concept than its franchisees. They’ve made the biggest investment in the brand and have every incentive to ensure it’s successful.
“We put our heart and soul into it,” he says. “We have probably the most at stake.”
But franchisees are worried about the current direction of corporate leaders. Much of that is tied to declining sales: In November, Jack in the Box reported total quarterly sales of $177.5 million—a 23.5 percent year-over-year decline. Norwich says Jack in the Box’s years-long transition from a restaurant operation company to an asset-light franchise company has been painful and franchisees worry corporate decisions are too focused on short-term metrics like stock performance and neglect the long-term health of the brand.
Norwich is a 27-year franchisee of the brand and the chairman of the National Jack in the Box Franchisee Association, which was formed in 1995 and now includes 95 franchisees representing the ownership of about 2,000 stores of the brand’s total of about 2,240.
He recalled the days when former Jack in the Box CEO Paul Schultz would meet with franchisees and talk through complexities of operating restaurants.
“He’d pound the table and say, ‘Don’t you think I care about restaurant operations? I have 80 percent of the stores,’” Norwich says. “Nowadays, there are operators that are much bigger than the company operations themselves. It’s changed.”
That evolution, Norwich says, has driven the need for franchisees to band together through the independent association.
“The issues we had back then are far different issues than the issues we have today,” he says. “There are so many things that have changed in the overall franchise business model over the last few years that it really necessitated strong franchisee associations more than ever now.”
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The association has continually sparred with corporate leadership in recent months: In October, the group approved a vote of no confidence in CEO Lenny Comma that franchisees described as a culmination of years of frustrations. In November, it filed a complaint with the California Department of Business Oversight regarding Jack in the Box’s new financial restructuring strategy. And in December, the group filed a lawsuit against the brand, alleging a breach of contract.
“The relationship shouldn’t be this way,” Norwich says. “But thus far it’s been difficult. And we don’t believe that we’ve been particularly well heard or understood.”
While the association has repeatedly made headlines, Jack in the Box operators aren’t the only ones making waves through an independent associations.
In October 2018, more than 400 McDonald’s operators voted to form a self-funded advocacy group, reportedly motivated by concerns over shrinking cash flow and burdens associated with store remodel mandates from corporate. Likewise, the Tim Hortons franchisees joined together to create the Great White North Franchisee Association in March 2017. That group, which boasted half of all Canadian franchisees as members, said its conception was in response to “the mismanagement of the Tim Hortons franchise” by TDL Group Corp. and its parent company Restaurant Brands International.