San Diego-based fast-food chain Jack in the Box has announced it will shutter between 150 and 200 of its restaurants in the coming years as part of a strategic overhaul aimed at improving financial stability. The move, revealed this week under the company’s new “Jack on Track” initiative, comes in response to persistent inflation, rising labor costs, and shifting consumer spending habits.
The burger-and-fries chain joins a growing list of U.S. food service businesses—including Shake Shack, Red Lobster, and Rubio’s Coastal Grill—that have scaled back operations recently due to economic headwinds. Jack in the Box said it will close 80 to 120 locations by the end of 2025, with additional closures of underperforming stores expected in 2026. Most of the affected sites have been operational for over three decades, although the company has not released a list of specific closures.
CEO Lance Tucker emphasized the goal of streamlining operations and returning to a more sustainable, asset-light business model. “Jack in the Box operates at its best and maximizes shareholder return potential within a simplified model,” Tucker said in a statement, calling the plan a return to “simplicity” for both the brand and its investors.
Debt Reduction and Potential Divestiture in Focus
As part of its turnaround strategy, Jack in the Box also announced it may divest from Del Taco, the Mexican American fast-food brand it acquired in 2022. While no final decision has been made, the consideration signals a broader move to shed less profitable assets.
The company plans to use proceeds from upcoming real estate sales to pay down existing debt. As of January, Jack in the Box reported current liabilities exceeding $426 million. This financial burden has pushed the company to reassess its investment strategy, including a sharp reduction in new restaurant development beginning in 2026. Instead, the company will focus on modernizing existing locations.
Preliminary financial results for the fiscal second quarter, which ended April 13, showed the company had opened five new Jack in the Box stores but closed 12. Meanwhile, Del Taco added six new locations while shutting down four. The data reflects a more cautious expansion approach in light of uncertain market conditions.
Financial Performance and Mark et Impact
Recent financial figures highlight the challenges facing the fast-food industry. Same-store sales in the latest quarter fell by 4.4% for Jack in the Box and 3.6% for Del Taco. Net income in the first quarter dropped to $33.7 million—down from $38.7 million a year earlier—a decline the company attributed to ongoing macroeconomic challenges across the sector.
Currently, Jack in the Box operates approximately 2,200 restaurants across 22 U.S. states, primarily concentrated on the West Coast. Its historical roots trace back to 1951 when the first location opened in San Diego. Today, the chain has over 40 outlets in the Los Angeles area alone.
Investor confidence has taken a hit as well. Jack in the Box shares dropped nearly 6% on Thursday, closing at $23.96. The company’s stock is down 41% since the beginning of the year, underscoring investor concern about the brand’s future amid broader industry pressures.
