Is Jack in the Box Poised To Overtake Its Fast-Food Competitors?

Jack in the Box is making a noteworthy comeback in Chicago after a four-decade absence and plans to open eight new locations by 2025. This marks the beginning of an ambitious expansion strategy after the company has “identified more than 125 potential trade area opportunities for future corporate and franchise development” across the Chicagoland area, according to the official Jack in the Box website.

“This strategic expansion into Chicago allows us to not only satisfy long-standing customer demand for our brand, but also to become a key member in the region’s thriving restaurant scene. We’re excited to bring our unique menu where customers can order any item at any time — day or night and we’re confident Jack in the Box will quickly become a favorite local destination.”

Darin Harris, CEO of Jack in the Box, via Jack in the Box corporate news

The move is part of a broader initiative to reintroduce the brand’s 24/7 menu offerings to Chicago residents, featuring a variety of popular items such as burgers, tacos, chicken sandwiches, milkshakes, and breakfast options. The expansion will include various formats like freestanding restaurants, drive-thrus, and dark kitchens, highlighting the brand’s commitment to catering to diverse customer preferences.

It is difficult to source all the details as to why Jack in the Box left the Chicagoland market and didn’t decide to return until now. Back in 2014, the company shared how, in the 1970s, Chicago had 20 Jack in the Box locations in the city, but it closed these restaurants in 1980 to focus on the Southwestern U.S., according to the spokesman at the time, Brian Luscomb. He also mentioned that the brand would have no problem reopening in the area if any franchisors were interested in doing so.

Jack in the Box opened its first store in 1951, according to its official website, and the company is based out of San Diego, California. The brand expanded by acquiring Del Taco, the Mexican American fast-food retailer, in 2022 for $585 million.

According to Statista, last year in 2023, Jack in the Box sales totaled $846.2 million and have been on a steady rise. The brand’s peak sales were $1.18 billion in 2011, and they declined into a plateau of between $700 million and $900 million for the next six years. Sales further dipped considerably during the pandemic, reaching new lows in the $300 million range, until they doubled in 2022 and have since risen steadily.

In 2019, Jack in the Box faced a major regime change when CEO Lenny Comma resigned amid financial instability and pressure from franchisees. Despite corporate expense cuts, many restaurants reported losses in 2018, with 300 locations averaging annual losses of $36,000. After this difficult period, the company initiated a two-year development plan and, by late 2022, signed 72 new multi-unit franchisees to open 303 new restaurants, including its first in Arkansas and a return to Florida after a three-decade absence.

Jack in the Box plans to increase its unit count by 2.5% annually, aiming to open 90 to 120 new locations per year, alongside its sister chain Del Taco, by 2027. Executives believe the chain could more than double its current 5,750 locations, with Del Taco potentially reaching 2,600 locations.

Ryan Ostrom, Jack in the Box’s chief marketing officer, attributes this growth to heightened brand awareness driven by social media and marketing efforts, which is helping the fast-food company expand into new markets. “We have 80% brand awareness,” Ostrom told analysts in January at the company’s “Investor Day” presentation. “The excitement we’re seeing across the United States about our brand, the demand in the U.S., and now socially, is something I’ve never seen.”

Jack in the Box CEO Darin Harris, who took over in 2020 after franchisee unrest, added, “I’m not sure I’m knowledgeable of any other restaurant chains that have such scale and proof of concept that still has such tremendous white space across the United States for growth.”

In 2023, Jack in the Box debuted its “Crave” store model that features two drive-thru lanes along with digital menus, express pickups, and smaller dining rooms. This location template has allowed them to scale, adding locations through a steady real estate pipeline that the new CEO claimed the brand had been missing before his arrival.