Jack in the Box, the 74-year-old fast-food chain, has announced a sweeping restructuring plan, as reported by multiple outlets, including CNN. The company will close approximately 10% of its 2,200 locations and explore selling its Del Taco brand.
The moves come as the chain grapples with declining sales and mounting debt amid reduced consumer spending.
Closures Target Underperforming Stores
The company plans to shutter 150 to 200 underperforming restaurants, with 80 to 120 closures expected by year's end. Most locations are on the U.S. West Coast. CEO Lance Tucker said the closures aim to strengthen the company's balance sheet.
"We're addressing our debt to accelerate cash flow," Tucker stated. The chain targets paying down $300 million in debt over the next two years.
Tucker emphasized that the closures will pave the way for growth. "We expect consistent, net-positive unit growth moving forward," he said.
The company's stock, however, reflects ongoing challenges, dropping 57% over the past year and nearly 7% in premarket trading Thursday.
Del Taco Sale Under Consideration
Jack in the Box is also weighing "strategic alternatives" for Del Taco, acquired just three years ago. The Mexican-inspired chain has struggled with rising inflation and fierce competition from rivals like Taco Bell. "Del Taco's results won't meaningfully contribute to our bottom line," Tucker told analysts. He suggested that new ownership could benefit the brand.
Sales at Del Taco fell 3.6% in the second quarter of 2025, while Jack in the Box reported a 4.4% sales decline. The company has suspended financial guidance as it explores the potential sale.
Industry Faces Broader Challenges
Jack in the Box's struggles mirror wider trends in the fast-food sector. McDonald's reported a sluggish start to 2025, and Chipotle noted a slowdown in consumer spending. However, competitors like Taco Bell are thriving, forecasting an 8% sales surge driven by innovative menu items.
The chain's restructuring is just the latest example of the pressures facing fast-food operators. Rising costs and cautious consumers are forcing companies to adapt quickly. For Jack in the Box, closing underperforming stores and potentially divesting Del Taco signal a bold pivot to stabilize finances and refocus on core operations.
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