Article
Jack in the Box focuses on growth
The regional chain is finding success in new markets, affirming its plans to someday become a national brand.
September 24, 2009
*Click herefor a slideshow on Jack in the Box's reimaging efforts.
Jack in the Box is slowly, methodically making its way across the country to become a national brand. The company has no published date for that goal but is continuing to move into new, contiguous markets.
The chain also is well on its way to achieving its refranchising target of being 70 percent to 80 percent franchised owned by the end of 2013. The company's goal for this fiscal year included refranchising 120 to 140 stores, and by the end of the third quarter had sold 98 to franchisees. The company also is opening new stores in new and existing markets and expects to overshoot that goal by 20 restaurants for a total of 60 in the fiscal year ending Sept. 27.
Despite the challenging financial market "we still remain pretty bullish on our growth," said Charlie Watson, senior vice president and chief development officer for Jack in the Box. Jack in the Box has about 2,200 total stores in 18 states.
The company has implemented a number of successful strategies in its growth plan, including seeding new markets with company stores. Jack in the Box develops the new store pipeline and then sells the stores — including those in the pipeline — to franchisees.
"It sounds like a company growth strategy, but it really is to facilitate and complement our franchise strategy," Watson said. "And we're doing that in a number of markets."
Not all new market growth starts with company-owned stores. Franchisees recently opened new markets inColorado Springs ,Colo. , andAlbuquerque ,N.M. Colorado Springs
Whether company- or franchise-owned, Jack in the Box is encouraged by strong sales in new markets, Watson said. Those results only confirm the company's growth strategy.
Franchisee profile
The company also is excited about who is franchising its stores, from multiunit operators coming from other brands to long-time operations staff moving into franchising.
Jack in the Box franchisees are primarily made up of those who have a history with the brand — its average tenure among existing franchisees is 22 years. Like Ali Keshani, a number of those were once area supervisor or regional franchise directors.
Kashani started with the company as a restaurant manager, moved on to become a multiunit supervisor and eventually area supervisor. After 25 years as a company employee, he decided in 2007 the time was right to move into franchising since the company was finally inHouston.
Kashani said he initially worried about making the transition from company employee to running his own business.
"I always knew I knew how to do it as far as operations," he said. "The biggest challenge was, can I manage it. It's easy to run it while somebody else watches it."
Jack in the Box's franchise support system put those worries to rest, he said. The company provides plenty of communications and answers questions he may have.
The company offers another way for its area supervisors and regional directors to get involved in franchising without having to start their own company. Instead, Jack in the Box has begun encouraging them to become operational partners for franchisees new to the brand. The Jack in the Box employees often become financial partners with the new franchisees and act as franchise operators, lending their brand expertise.
"Its something that we see as good for our employees and good for our franchise strategy and our franchisees," Watson said.
New voices
While the employee-to-franchisee path is a part of the company's culture, recruiting franchisees from outside the brand adds a fresh point of view, Watson said. Some of those new franchisees are on the company's national franchise advisory council, sharing their experience as multiunit operators for other brands.
"It adds tremendously to our culture, and it's something that we're very excited about," he said. "Its an opportunity to bring new franchisees in that want to grow — grow our brand, grow in new markets — and to bring the perspective of other brands they may have been associated w in the past. We think it's great."
Terry Shindle was new to the brand when he started his Jack in the Box franchise 3 ½ years ago. He said he was interested in the chain for its growth opportunities and its solid management and operations. He also liked its menu variety, which set it apart from other chains.
As a franchisee, he said also appreciates the company's emphasis on food safety and its operational systems. And he likes how Jack in the Box keeps its menu and brand contemporary, including testing new equipment and menu items at its development center.
Jack in the Box's senior management also is interested in what he and other franchisees have to say.
"I like their ability to integrate their thought process in the (operational) process in general — and getting feedback from the franchisee community and integrating some of our ideas," Shindle said. "We have a voice. And that's a real positive."
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