“Jack in the Box will implement a block closure program, which is projected to result in the closure of approximately 150–200 underperforming restaurants—a majority of which have been in the [restaurant] system for over three decades,” the company stated.
“The program will consist of approximately 80–120 restaurant closures between now and 12/31/2025, with the remaining underperforming restaurants closing thereafter based upon respective franchise agreement termination dates.”
Once the program is completed, the company stated, it expects to deliver “consistent, positive net unit growth.”
Jack in the Box, headquartered in San Diego, operates about 2,200 restaurants across 22 states under that brand and about 600 restaurants in 17 states under the Del Taco brand.
These shutdowns do not include the expected 1.5 percent to 2 percent restaurant closures for fiscal year 2025 and a 1 percent annual closure rate beginning the following year.
The closure of 150 to 200 stores is part of the company’s “JACK on Track” plan, aimed at boosting the restaurant chain’s long-term financial performance.
The plan includes measures such as selling certain real estate holdings to pay down debt, discontinuing dividend payments in order to use the majority of those funds for debt repayment, and “significantly” reducing spending on new restaurant development starting next year.
The measures are expected to strengthen the company’s balance sheet and ensure “sustainable growth in the coming years,” the company stated.
The company has hired Bank of America Securities to explore “strategic alternatives” for its Del Taco brand of restaurants, including divesting the business. Del Taco is the second-largest Mexican American quick-service restaurant chain in the United States in terms of operating units.
“Jack in the Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” Lance Tucker, the company’s recently named CEO, said. He said the recent actions focus on three main areas, according to the statement.
Restaurants Pressured, Positive Outlook
Jack in the Box’s store closures come as multiple restaurant companies have shut stores or filed for bankruptcy over the past 18 months.“Rising labor and food costs, along with the ongoing struggle to recruit and retain employees, remain among the top concerns for both full-service and limited-service operators,” the association stated, based on various surveys.
Despite these challenges, operators were “cautiously optimistic” about business conditions, with more than eight in 10 saying they expect sales this year to be higher or roughly the same as in 2024.
“The majority of operators say increasing traffic on-site and getting diners back in their seats will be more important to their restaurant’s success in 2025,” the association stated.
The industry is projected to hit $1.5 trillion in sales this year and add more than 200,000 new net jobs, which would bring the country’s total restaurant and food service employment to 15.9 million individuals. The restaurant sector is expected to remain the second-largest private-sector employer in the United States.
“The fundamentals of the restaurant industry are strong, and operators are optimistic about the year ahead,” Michelle Korsmo, president of the association, said. “Industry sales are expected to grow more than 4 percent this year.
“That growth will come from restaurant operators finding the balance of value and experience for consumers, and innovating breakthrough efficiency in their operations.”
