Jack in the Box to Close 150 to 200 Locations as Part of Cost-Cutting Effort

A West Coast fast-food institution is shuttering at least 150 “underperforming” locations in an effort to balance its books.

Jack in the Box, the San Diego-based fast-food chain, will close 150 to 200 of its roughly 2,200 storefronts as part of its newly announced “Jack on Track” cost-cutting strategy intended to expedite cash flow and pay down its debt. The company’s long-term liabilities totaled nearly $3.2 billion as of the first quarter of this year. 

The company did not specify which locations could be closed, except to say that most of them “have been in the system for over three decades.” The Los Angeles Times first reported the news. 

Eighty to 120 storefronts will close by the end of this year, with others closing by the end of 2026. The restaurant chain, founded in San Diego in 1951, operates over 40 L.A. locations. 

“Jack in the Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” Lance Tucker, the restaurant’s newly named CEO, said in a statement. The cost-cutting measures aim to provide “an overall return to simplicity for the Jack in the Box business model and investor story,” Tucker said.

The company, which also owns Del Taco, opened five Jack in the Box locations but closed 12 in its second fiscal quarter, ending on April 13, according to its preliminary second-quarter earnings report. It also opened six Del Taco locations but closed four. Jack in the Box purchased Del Taco in 2022 for about $585 million. 

L.A. County’s retail real estate market suffered a loss of momentum in the first quarter of this year as a shrinking retail labor force and broader economic uncertainty created headwinds for the sector, according to a recent analysis from Colliers. Retail vacancy in the county grew by 21 basis points to 6.7 percent quarter-over-quarter, and Colliers found some 1.5 million square feet in negative absorption for retail real estate in the first part of this year. 

The county’s unemployment rate also grew to 5.9 percent this past quarter, with retail jobs in particular taking a hit, Colliers found. Average asking rents are the silver lining, having stayed consistent quarter-over-quarter at $2.85 per square foot. Stable asking rent indicates that landlords are, at least for now, keeping steady as the market braces for volatility, per Colliers. 

Jack in the Box isn’t the only Southern California-based retail chain navigating financial distress lately, albeit at different scales and for different reasons. Fast-fashion brand Forever 21 plans to close all of its brick-and-mortar locations after filing for bankruptcy last month, its second filing in just six years. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.