Fast-food chain Jack in the Box has announced plans to close up to 200 underperforming restaurant locations as U.S. customers continue to cut back on spending.
The franchise said 80 to 120 restaurants would be shut down by the end of the year, and the rest of the low-profit locations will close based on franchise agreements.
Jack in the Box currently operates 2,200 locations across 22 states, most of which are located on the West Coast. California has 942 restaurants, making up 43 percent of the company’s total.
The closures, under a new “JACK on Track” plan, are meant to “address the balance sheet to accelerate cash flow and pay down debt,” CEO Lance Tucker said in a statement. Tucker was ushered in as CEO on March 31.
He continued: “While preserving growth-oriented capital investments related to technology and restaurant reimage; closing underperforming restaurants to position ourselves for consistent net unit growth and competitive unit economics; and, an overall return to simplicity for the Jack in the Box business model and investor story.”
The franchise also hopes to pay off $300 million in debt in the next two years from closing these locations.
Jack in the Box has not yet announced the specific restaurant locations expected to be shut down. The Independent has contacted the franchise for a comment.
The announcement comes as the company is continuing to pursue the sale of another of its brands, Mexican-inspired cuisine chain Del Taco.
However, according to the April 23 press release, the sale has been riddled with issues, leading the company to consider other options.
“As part of the plan, the Company has engaged BofA Securities to assist in the process of exploring strategic alternatives for the Del Taco brand, including a possible divestiture of the business,” the statement said.
Tucker noted: “I don’t know that (Del Taco’s) results over the next several years are going to meaningfully contribute to Jack’s bottom line.”
He then said, “It makes sense to move them to another owner.”
But Jack in the Box isn’t the only chain riddled with issues.
Macy’s also announced plans to close 66 store locations and its iconic Fulton Street location in Brooklyn after 30 years by the end of 2025.
