Jack in the Box closing up to 200 'underperforming' locations: What to know

Jack in the Box plans to close dozens of restaurant locations as it looks to boost the fast-food company’s financial performance.

The company said the restaurants in the planned "block closure program" were ones that were "underperforming" and, in many cases, several decades old. 

Here’s what to know:

Jack in the Box to close ‘underforming’ locations

What we know:

Overall, Jack in the Box said on April 25 that it plans to close 150 to 200 restaurants. 

Roughly 80 to 120 of the total restaurants it plans to shutter under the program will close their doors for good before the end of 2025, according to Jack in the Box. 

The rest of the underperforming restaurants on the chopping block will stop operations "upon respective franchise agreement termination dates," the company said.

What we don't know:

The specific Jack in the Box locations that will close in 2025 were not immediately shared by the company. 

Dig deeper:

The company noted how this announcement does not include the expected "1.5% to 2.0% of system unit closures for FY 2025, and an ongoing annual closure rate thereafter of approximately 1% of system units beginning in FY 2026." 

The company anticipates "consistent, positive net unit growth" after closing the 150 to 200 underperforming locations. 

The block closure plan is part of the "JACK on Track" initiative that Jack in the Box unveiled. In addition to the restaurant closures, Jack in the Box said that the strategy includes other measures meant to help the company see "sustainable growth" in the coming years through improvements in its financial performance and balance sheet. 

What they're saying:

"Our actions today focus on three main areas: addressing our balance sheet to accelerate cash flow and pay down debt, while preserving growth-oriented capital investments related to technology and restaurant reimage; closing underperforming restaurants to position ourselves for consistent net unit growth and competitive unit economics; and, an overall return to simplicity for the Jack in the Box business model and investor story," Jack in the Box CEO Lance Tucker said. 

Big picture view:

Jack in the Box’s current store count includes roughly 2,200 namesake restaurants across the U.S., primarily on the West Coast, as well as 600 Del Taco restaurants. The company acquired Del Taco in 2022. 

What's next:

Jack in the Box said it’s also looking at a possible divestment and other "strategic alternatives" for the Del Taco brand, according to its announcement. 

By the numbers:

The company said preliminary second-quarter same-store sales for Jack in the Box posted a 4.4% decline. Del Taco experienced a decline of 3.6%.

What's next:

The company is slated to release its final second-quarter financial results in mid-May.