People in Utah apparently like their Jack in the Box, and that’s giving the company confidence in its bid to move the unit growth needle.
The San Diego-based burger chain opened three new restaurants in Salt Lake City this year, part of a plan to open 15 locations in the market by the end of 2025. Those three locations, plus a fourth in Louisville, Ky., have bested the company’s expectations for sales, averaging $100,000 per week since they’ve opened.
“We’re incredibly happy with the performance in Salt Lake and in Louisville,” CEO Darin Harris told investors last week, according to a transcript on the financial services site AlphaSense. “We’re going to pace ourselves in these markets, but we’re very, very excited about the way we’ve entered” them.
A $100,000 per week implies $5.2 million over the course of a year, well over double Jack’s $1.9 million average unit volumes. Other locations opened in the company’s last fiscal year averaged $2 million.
To be sure, new-unit openings frequently generate strong early sales, and the key for the company—or any restaurant chain, for that matter—is maintaining sales over the long term.
But Harris insists that the early volumes from those restaurants are better than the company anticipated. But the new locations are designed in the chain’s new “Craved” prototype. And they’ve generated strong sales even though Jack in the Box starts its new units without the benefit of late-night and digital business.
Late night is a key daypart for the chain, and digital is one the company is intent on growing. In one of the highest-volume stores in Salt Lake City, for instance, turning on digital orders boosted sales by 16% overnight, Harris said.
“We’ve put together a specific playbook of how to enter the market, everything from operations, how we’re going to build awareness before and after coming to the market, how we want to ramp up digital sales and late night sales and without any LTOs,” he said.
The performance also gives the company some confidence in its expansion plans. Jack in the Box has been largely stagnant for the past 15 years and operates fewer locations than it did a decade ago. The chain operates 2,186 locations. It operated 2,255 in 2012, according to data from Restaurant Business sister company Technomic.
Harris was brought in as CEO in 2020 and he has made unit growth a top priority, starting by closing underperforming units and buying out some markets from franchisees, with the hope of turning them around and selling them to other operators. The company has inked 90 development deals for franchisees to open 389 locations.
Those plans include opening in new markets, including Florida, Arkansas, Montana and Wyoming. Harris said that sentiment for growth among franchisees “remains positive” despite higher costs and permitting and construction delays.
Jack in the Box is developing Salt Lake City along with two franchisees. In Louisville—“our first foray into true white space territory in many, many years,” Harris said—the company plans to open a second restaurant over the next two weeks and have five locations in the market by the end of 2025.
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.