The best example thus far is Jack’s partnership with Miso Robotics to test a fry-cooking robot that increases throughput by 30 percent, or roughly 60 baskets per hour, and a POS-integrated robot that automatically dispenses beverages and seals cups.
Jack believes these pieces—and other implementations—could improve margin by 200 basis points per store on average.
“Yes, we want it yesterday, to be honest with you,” said Harris, in reference to when all the strategic initiatives will roll out. "So we are aggressively pushing with our existing franchisees to realize some of those within the next quarter. I don't think we can get all of the 200 basis points just within the next quarter, but we would hope by three quarters from today, we would have realized a substantial portion of these."
Solving staffing and inflationary woes is the company’s way of providing the best experience possible for customers. So is Jack’s reimage program, which officially launched in the second quarter. Twelve corporate units are already in the design and permitting phase, and 136 franchise restaurants have been approved.
In Yuma, Arizona, the parking lot doubled in size to accommodate a double drive-thru and fully remodeled dining area. In the first month, the location saw a 25 percent lift in same-store sales and exceeded $100,000 in sales per week, driven mostly by transactions. To put it into context, that equates to an annualized AUV of more than $5 million.
Jack is providing capital incentive to encourage operators to join the remodeling program.
“We will continue to create more reimaged case studies like this one, which will influence our franchisees to take further advantage of the new program and its capital support, leading to significant progress on reimaging our restaurant base and ultimately sales growth, something we are enthusiastic about working to accomplish and is tremendously important to our future,” Harris said.
In terms of unit growth, Jack has signed 53 development agreements for 218 restaurants since it launched a revitalized franchise program last summer. So far, 12 of these stores have opened. A little more than 30 percent of existing operators have inked a deal, but Harris estimates that will improve to about 50 percent around this time next year.
Del Taco, which joined the Jack family in March, saw same-store sales rise 2.5 percent in the second quarter. The fast casual signed 10 development agreements in Q2, and since 2021, new operators have signed up for 74 stores across 11 states. Currently, roughly 49 percent of Del Taco’s footprint is company-owned, but Jack is finalizing a go-to-market plan to refranchise a majority of those units.
“We have internally set a target for where we think we become asset light,” Harris said. “We’re not prepared to provide that guidance today. But what I would say is that we think there's tremendous opportunity to refranchise Del Taco. We're prepared. We've identified markets and how we would cut it up with development opportunities and we've been working with a third party that will help us launch into this refranchising initiative. So we'll provide more details to come.”
Jack finished Q2 with 2,207 restaurants, including 2,035 franchises and 172 corporate outlets. Del Taco had 599 stores, including 293 company stores and 306 franchisee-led locations.
For the full fiscal year, Jack’s same-store sales are expected to be flat to positive 1 percent while Del Taco’s comps are projected to grow 3 to 4 percent.