SAN DIEGO - Jack in the Box Inc. (NASDAQ: NASDAQ:JACK), a prominent player in the quick-service restaurant sector, has announced a new franchise agreement to open 12 locations in the Chicago area. This move is part of a larger initiative by the company, which includes the introduction of two CloudKitchens and eight company-operated restaurants in Chicago's suburbs.
According to Van Ingram, vice president of franchise development, the expansion capitalizes on Jack in the Box's diverse menu, which caters to customers around the clock. The brand aims to leverage Chicago as a strategic point for further growth in the Midwest.
The company's expansion strategy also involves seeking additional franchise partners. Jack in the Box has identified over 100 potential franchise opportunities in the Chicago Metro Area and is actively recruiting experienced multi-unit operators to join its network.
The expansion comes in the wake of successful new market openings in Salt Lake City and Louisville, highlighting the nationwide demand for the brand. Jack in the Box is recognized for its wide-ranging menu that includes burgers, tacos, chicken sandwiches, and options for breakfast and late-night dining. The new Chicago locations will feature dine-in, drive-thru, and mobile ordering services.
Jack in the Box operates approximately 2,200 restaurants across 22 states and also owns Del Taco®, the second-largest Mexican-American quick-service restaurant chain in the U.S. The company continues to offer franchising opportunities for both brands.
This expansion news is based on a press release statement from Jack in the Box Inc.
In other recent news, Jack in the Box reported a 2.2% decline in system same-store sales for the third quarter of 2024. Despite this, the company is actively working to enhance value offerings and drive digital growth. As part of recent developments, Jack in the Box plans to expand operations, with a particular focus on entering the Chicago market and accelerating its re-imaging program.
Meanwhile, Del Taco has opened a new restaurant in Kissimmee, Florida, featuring the company's Fresh Flex (NASDAQ:FLEX) design and a new menu item in collaboration with actor Danny Trejo's Trejo's Tacos. This is the second Del Taco location in Kissimmee and the seventh in the Orlando area.
In response to Jack in the Box's recent performance, TD Cowen has revised its outlook on the company's shares, lowering the price target to $57 from $59 while maintaining a Hold rating. For the full year, Jack in the Box expects an adjusted EBITDA between $320 million and $325 million, with operating EPS of $6.10 to $6.25. These developments reflect the ongoing efforts of both companies to adapt and grow in the face of changing market conditions.
InvestingPro Insights
As Jack in the Box (NASDAQ: JACK) embarks on its Chicago expansion, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at $868.51 million, reflecting its position in the quick-service restaurant industry.
Despite the ambitious growth plans, Jack in the Box faces some financial challenges. An InvestingPro Tip indicates that the company operates with a significant debt burden, which could impact its expansion capabilities. Additionally, the company's revenue growth has been negative, with a 7.43% decline in the last twelve months as of Q3 2024.
On a positive note, Jack in the Box has maintained dividend payments for 11 consecutive years, as highlighted by another InvestingPro Tip. This commitment to shareholder returns is reflected in the current dividend yield of 3.88%, which may appeal to income-focused investors.
The company's stock performance has been volatile, with a 32.59% price decline over the past six months. However, analysts remain optimistic, predicting that the company will be profitable this year. This aligns with the expansion strategy and potential for growth in new markets like Chicago.
For investors seeking a deeper understanding of Jack in the Box's financial health and growth prospects, InvestingPro offers 8 additional tips that could provide valuable insights into the company's future performance.
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