Having discussed Jack in the Box’s (JACK) same-store sales growth in the previous two articles, we’ll now discuss another revenue driver, unit growth. By the end of fiscal 3Q16, the company operated 2,251 Jack in the Box brand restaurants and 688 Qdoba restaurants.
Jack in the Box brand
In the last 12 months, the brand has added two company-owned restaurants to increase its unit count to 415, while franchised restaurants rose by one unit to take the count to 1,836.
The company management had projected 20 new Jack in the Box brand restaurants system-wide for fiscal 2016. By the end of 3Q16, the company had increased its unit count by two units, so there is room for 18 new restaurants in 4Q16. However, analysts are expecting the company to add two company-owned restaurants and 15 franchised restaurants in 4Q16. In addition to increasing its margins, JACK is aiming to increase the percentage of franchised restaurants to 90% by 2017. This could have prompted analysts to expect a decline in company-owned restaurants’ unit count in 2017. So, in the first three quarters of 2017, analysts are expecting the company to refranchise 69 restaurants to bring their unit count down to 348. However, franchised restaurants are expected to add 111 units to increase their unit count to 2,277 by the end of 3Q17.
Qdoba Mexican Eats
In the last 12 months, Qdoba has added ten company-owned restaurants to increase the unit count to 344. During the same period, it has added 24 franchised restaurants to increase the unit count to 344.
The company management had expected to add 50–60 new Qdoba restaurants system-wide for fiscal 2016. By the end of 3Q16, the brand had increased its unit count by 27 units. So, in 4Q16, there is room for the addition of 23–33 new restaurants. Analysts are expecting Qdoba to add three company-owned and 22 franchised restaurants in 4Q16. Analysts are also expecting the brand to add 23 company-owned and 18 franchised restaurants in the first three quarters of 2017.