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How JACK Is Expanding Its Business

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Jack in the Box brand

By the end of fiscal 2Q17, the Jack in the Box brand, operating under the umbrella of Jack in the Box (JACK), operated 371 company-owned restaurants and 1,889 franchised restaurants.

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Unit growth

In the last 12 months, the company has increased its unit count of franchised restaurants by 51 units, while the unit count of company-owned restaurants has decreased by 42 units. As part of the refranchising campaign to increase the percentage of franchised restaurants to 90%, the company has refranchised 60 company-owned restaurants.

During the quarter, the company opened 15 new restaurants and closed ten underperforming restaurants. The company’s management signed a letter of intent to sell 70 more company-owned restaurants.

During the last 12 months, Jack in the Box brand’s peers McDonald’s (MCD), Wendy’s (WEN), and Burger King of Restaurant Brands International (QSR) have increased their unit counts by 1,131 units, 69 units, and 760 units, respectively.

Qdoba Mexican Grill

By the end of fiscal 2Q17, Qdoba operated 377 company-owned restaurants and 340 franchised restaurants. In the last 12 months, the company has increased its company-owned restaurants by 39 units, while the unit count of franchised restaurants decreased by five units.

In fiscal 2Q17 alone, Qdoba opened 25 new restaurants and closed seven restaurants. Of the new restaurants, 13 were company-owned and 12 were franchised restaurants.

During the same period, Qdoba’s peers Chipotle Mexican Grill (CMG) and Panera Bread (PNRA) increased their unit counts by 225 and 45 restaurants, respectively.

Next, we will look at JACK’s EBIT margins in fiscal 2Q17.

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