Dive Brief:

• Jack in the Box predicted a return to net unit growth in 2023 as part of its Q4 2022 earnings presentation, the company said in a press release published Tuesday.
• Jack in the Box’s unit counts have declined gradually since 2019, with the chain closing a net 54 restaurants this year, according SEC filings.
• CEO Darin Harris said the chain has been strengthening franchisee relationships in core markets and combining franchised and corporate resources to enter new markets.

Dive Insight:

The unit growth expected next year will include entering two new markets: Salt Lake City and Louisville, Kentucky. The company said in the press release that it would open franchised and company-owned stores in the Salt Lake City area early next year, and said the region was primed for growth because of familiarity with the brand, which is strongest in the West.

Louisville, by contrast, is “a true ‘whitespace’” territory in a part of the country with less proximity to existing core territories,” the company said. Units there will open later in 2023. 

“Success in new markets will be key to building further excitement and momentum within our system, while gaining on our objective of having Jack in the Box operating in 40 states by 2030,”  Tim Linderman, Jack in the Box chief development officer, said in a statement. 

In 2021, Jack in the Box announced it was relaunching its franchise development program. Jack in the Box has since signed 68 development deals encompassing 267 store commitments, with 155 of those commitments coming in the last 12 months. The chain also recently signed its first new franchisee in over 10 years. That franchisee agreed to develop 37 units across the Southeast, according to the press release.  

The company has also worked to strengthen its value proposition for franchisees, which is key to its growth given its high percentage of franchised units. In August, Jack in the Box began offering discounted royalty rates for new multi-unit franchisees, claiming the lower rates could save franchisees up to $180,000 per location over five years. In October, Jack in the Box unveiled a 1,350-square-foot prototype for an off-premise-only restaurant, billed as a way to speed up development and reduce construction and labor costs.

Earlier this month, the chain hinted that it was pursuing expansion through deals with convenience store brands in a variety of markets. Jack in the Box has also tried to refresh its marketing to strengthen its brand position with consumers, including a campaign featuring Mark Hamill, who briefly worked for the chain before becoming a famous actor.