Jack in the Box named a pair of longtime industry executives to its board of directors Tuesday, in a deal with activist investor Jana Partners.
Jean Birch, former president of IHOP, and John Gainor, who retired as Dairy Queen CEO in 2017, were both named independent directors to the Jack in the Box board. The two directors give the company’s board considerable experience, particularly in franchising, as Jack in the Box moves forward as an independent company.
Birch and Gainor “bring extensive experience as executives in the restaurant industry and track records of successfully partnering with franchisees, which we believe will help the company’s efforts to drive growth, accelerate operational performance and create shareholder value,” said Barry Rosenstein, managing partner with Jana Partners, in a statement.
The two new board members come amid a major dispute between the brand and its operators. Franchisees, concerned with cuts in corporate overhead and marketing, have filed a lawsuit against the company and called for Jack in the Box to replace CEO Lenny Comma.
The weak franchise relationship has generated concerns about the company’s growth prospects.
Franchisees, after all, operate the vast majority of the chain’s more than 2,200 locations. And unhappy franchisees are less likely to build new locations.
The National Jack in the Box Franchisee Association praised the move. “We welcome the addition of John Gainor and Jean Birch to the Jack in the Box board of directors as members of the Jack in the Box family,” the association’s board of directors said in a statement sent on Wednesday. “We recognize the wealth of foodservice experience and track record of bridging the gap between management and the franchise community and are excited for the opportunity to work together.
“We are optimistic that these additions to the board from investor Jana Partners will produce the productive discourse between the franchise community and management that we have been seeking and remain hopeful that this is a step toward addressing the concerns of the franchise community.”
Birch has more than 30 years of experience in the industry and most recently was a board member of Papa Murphy’s, which was recently sold to Canadian company MTY Group. She was president of IHOP from 2009 to 2012 and before that was president of Romano's Macaroni Grill. Previous experience includes Corner Bakery Cafe and Yum Brands.
Gainor was CEO of International Dairy Queen from 2008 to 2017. Before he started working for the Minneapolis-based chain in 2003, he had been a supply chain consultant.
“We’re delighted to be able to add two directors to our board with a breadth of experience in the restaurant industry and a deep knowledge of franchising,” said David Goebel, lead independent director for Jack in the Box, in a statement.
Jana Partners took a 6% position in Jack in the Box, and the San Diego-based chain immediately began exploring a sale.
The company recently ended that process, opting for a refinancing strategy instead of a sale. Franchisees, who had called for a sale of the company, were critical of that plan.
UPDATE: This story has been updated to include a reaction from the National Jack in the Box Franchisee Association.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.