Wall Street analysts also mulled the Del Taco v. Jack in the Box also debuted its new off-premises-only MK12 prototype with a modular design that allows franchisees to open drive-thru-only restaurants, with a s eparate lane for online orders or delivery pickup. Together, the two brands will total 2,800 units spanning 25 states (and Guam) and generating an estimated $5 billion in systemwide sales.īuilding digital muscle: Both Jack in the Box and Del Taco could do more to build digital sales, and there’s power in collaboration, said Harris.ĭel Taco launched its first loyalty program in September, and earlier this year unveiled a new store prototype with delivery pickup areas, and double drive through lanes for mobile orders. When that goal was introduced, it was assumed Harris meant just Jack in the Box, but on Monday he said that growth plan includes both brands, putting the goal much more in reach. Harris said the company is open to refranchising, providing opportunities for the franchise base on both sides to add to their portfolios.Īccelerated growth: Earlier this year, Harris pledged to increase system units by 4% annually by 2025. But Del Taco is in Florida, Alabama, Georgia and Michigan, where Jack in the Box has yet to open.įranchisee cross pollination: Jack in the Box is mostly franchise operated and Del Taco is about 50/50 franchise-to-company owned. Jack in the Box is in states like Texas, Louisiana, Tennessee and North Carolina, where Del Taco has no presence, for example. That means franchise operators are familiar with the markets and the customer profiles. Geographic familiarity: The combined chains operate with similar footprints geographically - mostly in the West but with national potential. The increased scale will improve margin opportunities for both brands, Harris said. Like Jack in the Box, Del Taco does well as a “late snack” brand. But, unlike Qdoba, Del Taco also knows a thing or two about burgers and fries. Menu-wise, Jack in the Box knows a thing or two about “legendary” tacos, Harris noted. Simple synergies: Jack in the Box expects synergies between the two QSR brands to result in $15 million in savings by the end of fiscal 2023, and some of that will come from procurement and supply chain benefits. Almost all of Del Taco’s 603 restaurants have drive-thrus, for example, as do about 90% of Jack in the Box’s 2,200 locations. It’s a same-segment match: Qdoba is really a fast-casual brand, while Del Taco is solidly in the quick-service category, said Harris. Del Taco is the nation’s second-largest Mexican QSR chain - though No. San Diego-based Jack in the Box was founded in 1951, and neighboring Lake Forest, Calif.-based Del Taco in 1964. Harris described both Jack in the Box and Del Taco as “scrappy, innovative, challenger brands” with the right operational and cultural fit.
CEO, along with Chief Financial Officer Tim Mullany laid out a number of reasons why the Jack/Del Taco marriage is strategically and financially compelling. The deal is expected to close in the first quarter of 2022 and is subject to shareholder and other regulatory approvals.ĭarin Harris, Jack in the Box Inc. announced an agreement to acquire rival brand Del Taco for about $575 million on Monday. That was the (somewhat paraphrased) first question from a Wall Street analyst after Jack in the Box Inc.
So why the heck would the company buy yet another Mexican brand? Jack in the Box sold the Qdoba Mexican Eats chain in 2018 after owning it for about 15 years without great success.
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