Jack in the Box(US:JACK)2025-11-19 21:17Restaurant Operations - As of September 28, 2025, Jack in the Box operated and franchised 2,136 restaurants, with 93% (1,986) being franchised[14]. - Del Taco served approximately 2 million guests each week and operated 576 restaurants, with 77% (444) being franchised as of September 28, 2025[16]. - The total number of Jack in the Box restaurants is 2,136, with 150 company-operated and 1,986 franchised[136]. - The total number of Del Taco restaurants is 576, with 132 company-operated and 444 franchised[136]. - The Jack in the Box restaurants are approximately 1,372 square feet and support a Y-Lane drive-thru configuration[23]. - The Del Taco restaurants are approximately 1,152 square feet and also support a Y-Lane drive-thru configuration[24]. - As of September 28, 2025, the Company had a total of 5,046 employees, with 4,440 being restaurant employees[39]. - Approximately 84% of restaurant employees were part-time as of the end of fiscal 2025[39]. Franchise Agreements - The franchise agreement for Jack in the Box includes an initial franchise fee of $50,000 per restaurant and royalty payments of 5.0% of gross sales[18]. - The franchise agreement for Del Taco includes an initial franchise fee of $35,000 per restaurant and royalty payments of 5.0% and 4.0% for marketing, respectively[19]. - Approximately 93% of Jack in the Box restaurants and 77% of Del Taco restaurants are franchised, indicating a high reliance on franchisee performance for revenue generation[84]. Financial Performance - The Company reported that same-store sales, system restaurant sales, and average unit volumes (AUVs) are key performance metrics used to assess profitability[161]. - Jack in the Box company-operated restaurant sales decreased by $10.3 million, or 2.4%, in fiscal 2025 compared to fiscal 2024, primarily due to a decrease in transactions[167]. - Del Taco company-operated restaurant sales decreased by $71.4 million, or 25.3%, in fiscal 2025 compared to fiscal 2024, driven by a decrease in the average number of restaurants and transactions[177]. - Same-store sales at Jack in the Box company-operated restaurants decreased by 3.7% in fiscal 2025, with transactions down by 5.7% and average check up by 2.0%[168]. - Same-store sales at Del Taco company-operated restaurants decreased by 2.4% in fiscal 2025, with transactions down by 6.9% and average check up by 4.5%[178]. - Franchise rental revenues for Jack in the Box decreased by $14.5 million, or 4.2%, in fiscal 2025, primarily due to lower sales[174]. - Franchise royalties for Jack in the Box decreased by $7.1 million, or 3.4%, in fiscal 2025, driven by lower sales[175]. - Franchise rental revenues for Del Taco increased by $7.7 million, or 27.3%, in fiscal 2025, primarily due to higher rental income from new subleases[181]. - Franchise occupancy expenses for Del Taco increased by $7.2 million, or 25.9%, in fiscal 2025, primarily due to higher operating lease costs[183]. Strategic Initiatives - The Company plans to accelerate cash flow by discontinuing dividends and reallocating funds to initiatives that drive sales growth, particularly in digital and technology[25]. - The Company announced a plan to explore strategic alternatives for the Del Taco brand, leading to a Stock Purchase Agreement to sell Del Taco for an aggregate purchase price of $115 million in cash[163]. - The Company entered into a Stock Purchase Agreement to sell Del Taco for an aggregate purchase price of $115 million in cash[13]. Employee and Training Programs - The company invests in employee training and development to reduce turnover and improve service quality[63]. - The company offers a comprehensive benefits package including medical, dental, vision insurance, and a 401(k) plan with company matching contributions[42]. Competition and Market Risks - The company faces significant competition in the food service industry, particularly from established national and regional chains, as well as local businesses[68]. - The company is subject to risks related to macroeconomic conditions, including changes in consumer confidence and discretionary spending[57]. - Changes in customer preferences related to dietary concerns could lead to a decline in sales and royalties from franchisees[71]. - The effectiveness of marketing and promotional programs is critical, as competitors with greater financial resources may impact the company's market position[75][76]. Regulatory and Compliance Risks - The company is committed to maintaining compliance with various federal, state, and local laws governing food safety and employee rights[53]. - The company is subject to various consumer protection and privacy laws, which could lead to material legal costs[94]. - Compliance with the Americans with Disabilities Act and similar state laws may incur significant expenses related to modifications and legal claims[93]. - The company is subject to increasing legal complexity and potential litigation costs that could materially affect financial results[107]. - The company is subject to financial and regulatory risks associated with owned and leased properties, which could adversely affect operational performance[85]. Financial Condition and Debt - The Company has approximately $1.7 billion of outstanding debt as of September 28, 2025[121]. - The Company declared total dividends of $16.7 million in 2025, a decrease from $34.2 million in 2024, and has discontinued its dividend[210]. - As of September 28, 2025, the Company had $81.8 million in cash and restricted cash, with available borrowings of $96.8 million under its credit facilities[203]. Cybersecurity and Technology - The company relies heavily on information technology and digital service providers for operations, including point-of-sale processing and order management[118]. - The company maintains a comprehensive information security program to manage cybersecurity threats[126]. - The company engages third parties to assess and remediate material risks from cybersecurity threats[133]. - The Audit Committee oversees the company's cybersecurity and data privacy risk management[134]. - The company is subject to risks associated with increasing dependence on digital commerce platforms and technologies[117]. Economic and Commodity Risks - The company is subject to volatility in food and commodity costs, which can affect profit margins and may require menu modifications[58]. - Increased labor costs due to minimum wage requirements and other regulatory changes could adversely impact the company's operating costs[64]. - The company relies on frequent deliveries of fresh produce and other food products, making it vulnerable to supply chain disruptions[62]. - Severe weather conditions and natural disasters could result in property damage and lost restaurant sales, particularly affecting locations in California and Texas[77][78]. Financial Reporting and Internal Controls - Effective internal controls are necessary to ensure accurate financial reporting; weaknesses could harm investor confidence and stock value[108]. - Changes in tax laws could adversely affect the company's income tax expenses and overall financial condition[109].