Editor's note: This story originally ran in Restaurant Business sister publication CSP Daily News.
Jack in the Box is eyeing convenience stores in its plans for substantial growth.
The 71-year-old fast-food chain, founded in San Diego, has more than 90 c-store locations among its 2,200 restaurants nationwide. But it wants a lot more, and is eager to expand its reach beyond its core markets of California and Texas. And it believes convenience stores can help accomplish that goal.
“We feel like there’s an opportunity for about 6,000 total Jack in the Box locations,” Van Ingram, vice president of franchise development, told CSP.
“Our primary focus had been on growing with our existing franchisees in our core footprint, but now we’re pursuing development and aggressive growth in new markets,” he said. “We’re looking for new franchisees and operators to come into our system and operate c-stores and travel plazas.”
Jack in the Box's unit count has stagnated for much of the past decade, but it has taken steps to reverse that trend over the past year. It closed some underperforming locations, bought up weaker franchise units with the intent to sell them, and invested in a franchise sales department. It also signed development deals with several franchisees.
While the brand believes that convenience stores can help it grow, Ingram believes that a c-store can increase its own reach with the addition of a quick-service restaurant.
“I always describe it as a three-legged stool,” he said. “You’ve got your petroleum sales, your inside sales, and then to have a really good, viable location and justify the investment, having a QSR partner in your facility. I think it’s a huge benefit, and clearly the industry has gone that way.”
The 90 Jack in the Box restaurants in c-stores currently are all in its core markets of California and Texas, leaving a huge area of “white space” for it to fill, Ingram said, adding that c-stores should consider a Jack in the Box for three reasons:
- It offers menu items for all five dayparts, including snacking and late night.
- It offers its entire menu all day, “ideal for truck drivers and motorists looking for variety,” he said.
- It offers prime markets available for development with new franchisees.
“You can get a burger for breakfast and a breakfast burrito for dinner,” Ingram said. “You can get our products late at night. And then we have a lot of options that are just targeted toward snack occasions.”
The traditional three-daypart model has changed, he said, which plays to Jack in the Box’s model.
“Look at people’s behavior in today’s world. People are eating more individual meals throughout the day and looking for snacks,” he said. “Certainly, when you’re on the road and looking for an opportunity to continue your trip, having those snack opportunities is a big key for us.”
Ingram said the expansion push is a mix of the restaurant chain approaching c-stores and c-stores coming to them.
About 85% of Jack in the Box business is via drive-thru, and having a drive-thru is one requirement for a c-store to land a Jack in the Box franchise; however, Ingram said, the drive-thru percentage isn’t quite as high as in traditional freestanding outlets because travelers at c-stores like to get out of their cars, stretch their legs and visit the bathroom.
Another requirement for a c-store to open a Jack in the Box is having at least 500 square feet for interior dining, he said. In addition, about 1,350 square feet is required in the c-store to accommodate the kitchen and drive-thru area.
Choosing new locations includes Jack in the Box examining traffic counts—the chain prefers areas with at least 20,000 cars daily—and targeting locations with access to major highways and intersections.