3/1/2024 0 Comments Jack in box corporate![]() Those investments are helping cover this year’s food and wage inflation while making up for some of the margin the company lost in 2022. Harris said the company will continue taking a more data-driven and surgical approach to pricing, even as inflation shows signs of easing.Ī new internal pricing team formed last year has been equipped with technology and machine learning tools. Labor as a percentage of company-owned sales fell 340 basis points, partially offset by wage inflation of 4.3 percent. ![]() Half of the system has installed new cheese pumps and Hydra Rinse shake machines, which together represent 30 percent of the annualized savings possible.Ĭommodity inflation was 7.7 percent for the quarter. ![]() Harris said the brand is starting to see progress on its 200-basis-point restaurant-level margin opportunity, which represents potential annual savings of $55,000 per restaurant. Restaurant-level margin at Jack in the Box was 21.4 percent in Q2, up 6.4 percent from the same period a year ago. Profitability initiatives and a focus on maximizing store-level ROI are encouraging more franchisees to build and open new restaurants, he added. “This is very encouraging as our franchisees look to expand with this lower-cost prototype.” “The restaurant has been open for about nine months, has all of our latest equipment, and we have seen a much higher level of sustained outperformance in terms of AUV and sales, particularly compared to the honeymoon curve we typically see in newly opened locations,” Harris said. The store is seeing 15 percent of sales coming through digital channels, aided by food lockers for speed and convenience. On the topic of strong early performance, Jack in the Box’s first drive-thru-only prototype in Oklahoma continues to outperform expectations by generating average weekly sales of around $43,000. With Salt Lake City being a combined market, Harris said “all of our resources and efforts” are being activated in the hopes of making it the strongest new market opening in the chain’s history. The goal is to have 10 units in the market by the end of next year through a combination of company-owned and franchised openings. The first Jack in the Box location in Salt Lake City will open next month. The chain is on track to reach positive unit growth in 2023 for the first time since 2019, with 25–30 new restaurants slated to open by the end of the year. It ended the quarter with 2,187 restaurants, including 140 company-owned locations and 2,047 franchised locations. Jack in the Box’s restaurant count was positive in Q2 with two franchise openings and one franchisee closure. QSR’s Transformational Brand of 2022: The Rebirth of Jack in the Box Jack in the Box’s Development Reaches ‘Turning Point’ “We chose to enter the Mexico border states due to the strategic partner we identified, their distribution capability, the brand affinity due to adjacent Jack in the Box markets, and the ease to which we can assist with nearby restaurant and franchise support,” he said. It marked the brand’s first agreement in the country in over 30 years, but Harris said that doesn’t mean the company is embarking on an aggressive international growth strategy. Jack in the Box also recently inked a franchise agreement for 22 restaurants in Northern Mexico. Highlights include bringing in the first new franchisee in over a decade, the addition of new markets including Florida and Arkansas, and incremental development agreements via Del Taco refranchising, including commitments to bring both brands into new territories. Since launching its development program in mid-2021, Jack in the Box has signed 76 new agreements for a total of 335 restaurants, with 69 commitments in fiscal 2023. “We’ve approved more sites in the past three or four quarters than we have in the prior three or four years,” Harris said during the company’s Q2 earnings call. That’s the most CEO Darin Harris has seen in his tenure, and the most the company has witnessed in at least a decade. Jack in the Box has 61 restaurants currently in the permitting, design, or construction phases.
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