Jack in the Box will shutter 150 to 200 underperforming restaurants in an effort to improve its financial performance.
The fast food chain, with around 2,200 locations across 21 states, said on Tuesday that the upcoming closures were part of a new ‘Jack on Track’ plan.
Of those closures, about 80 to 120 are expected to happen this year and the rest in 2026.
Bosses at Jack in the Box, ranked the sixth biggest burger chain, are grappling with $3.17 billion in debt and a four per cent drop in sales.
The 74-year-old burger chain said the closures announced this week are on top of the 30 to 40 already planned for this year.
Over the past 18 months, restaurants across the country have been closing in droves, squeezed by soaring costs and customers cutting back amid stubborn inflation.
Sit-down chains have taken the hardest hit — Red Lobster, Hooters, and TGI Friday’s have all filed for bankruptcy and shuttered locations. TGI Fridays is down to just 85 locations.
Until this year, fast food chains had largely avoided mass closures. But in early March, Red Robin said it will shutter 70 restaurants. And earlier this month, it emerged that Burger King will lose locations after one of its major franchisees filed for bankruptcy.
Jack in the Box will close between 150 and 200 restaurants as part of its ‘JACK on Track’ plan
Jack in the Box CEO Lance Tucker said the closures aim to ‘strengthen our balance sheet, boost cash flow, and reduce debt’.
The company is also planning to pay off $300 million in debt over the next two years.
Jack in the Box is also looking to sell Del Taco to another company three years after purchasing the now-struggling Mexican restaurant chain.
Before the decision, multiple Del Taco franchisees had filed for bankruptcy protection.
Results for the first quarter of the year show Jack in the Box and Del Taco suffered a 4.4 and 3.6 percent drop in same-store sales compared to last year’s results.
Prior to the second quarter results, the company’s stocks were plummeting for 12 months.
While its financial struggles continue to grow, Jack in the Box is moving forward with plans to improve its restaurants and invest in evolving technologies.
However, it has discontinued its dividend to focus on paying down debt and begin spending less money on advancements next year.
Jack in the Box has $3.17 billion in debt and is aiming to pay $300 million with its new plan
Jack in the Box CEO Lance Tucker said closing unprofitable restaurants is key to maintaining net unit growth, boosting cash flow, and simplifying operations.
Read More
Another health-conscious fast food burger chain suddenly closed all of its locations
Jack in the Box is expected to operate over 2,000 restaurants next year and is aiming to pay off $300 million in debt.
It’s also expecting to see a negative low-to-mid-single digits in same-store sales compared to its 1.3 percent decline last year.
As of now, Jack in the Box has not formally announced companies that have shown interest in purchasing Del Taco and how much they’d sell the chain for.