Nearly All Jack in the Box Restaurants Remain Open

    The fast-food chain postponed rent collection for 40 percent of franchisees.

    Jack in the Box exterior.

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    To assist franchisees, Jack in the Box reduced April marketing fees from 5 percent to 4 percent of gross sales.

    Jack in the Box expects same-store sales to drop by more than 4 percent in the second quarter due to the COVID-19 crisis after a favorable start.

    Through March 8, the brand grew comps 5.2 percent year-over-year, which breaks out to a 5.1 percent increase at company-owned stores and a 5.3 percent lift at franchises.

    About a week later, Jack in the Box closed its dining rooms. And in the five weeks ending April 12, sales dropped 17 percent systemwide, 16.8 percent at corporate units, and 17 percent at franchises. For Q2, the company projects a 4.2 percent slip systemwide, with a 4.1 percent slide at company-owned locations and a 4.2 percent decrease at franchises.

    More than 99 percent of Jack in the Box restaurants are still open and operating via an off-premises model.

    The brand started a new paid sick leave program for employees at company-owned stores who are quarantining to take care of themselves or a family member. For employees arriving to work, the company has provided masks and thermometers to both corporate units and franchises.

    To assist franchisees, Jack in the Box reduced April marketing fees from 5 percent to 4 percent of gross sales and postponed collection. They will be collected over the next two years, beginning at a future date. The brand also postponed the collection of about 40 percent of rental payments, and that will be repaid over three months beginning in July. In locations where Jack in the Box is the primary lessee, the company is negotiating terms with landlords. In addition, franchise development agreements were delayed by at least six months and other capital investments were suspended.

    “We thank our franchisees for their partnership in upholding a variety of rigorous safety procedures, including implementing heightened sanitation requirements, practicing employee social distancing, and adhering to glove and mask protocol for all patrons and workers,” said CEO Lenny Comma in a statement. “We are cognizant of the economic burden on our franchisees as a result of this pandemic and want to ensure their financial health during these difficult times.”

    Jack in the Box drew down more from its credit facility, and now has over $165 million in available cash. The restaurant paused its share repurchase program and did not buy back any shares in Q2, as well.

    “While we navigate through this time of uncertainty, Jack in the Box remains committed to operating our restaurants with integrity, providing great guest service, and most importantly, protecting the health and safety of our employees and guests,” said CEO Lenny Comma in a statement.

    “ … We thank our employees, franchisees and partners for their tireless efforts to keep our drive-thrus open so that we may continue to serve our communities,” he added. “We entered into this crisis in a position of strength, and we intend to emerge out of it even stronger.”

    To support the community, franchises are donating gloves, providing free meals to first responders, and offering significant discounts to public transportation workers. Jack in the Box donated 10,000 discounted uniforms to a designer so that they could be converted into masks for first responders.