We're really not sure what Jack in the Box sells these days, and that should worry franchisees.
— Jason Clampet
Jack in the Box Inc. has already dropped its famous two-for-99-cents taco deal in some markets. Now, franchisees are hoping it dumps Chief Executive Officer Lenny Comma as well.
Citing sliding sales, franchisees of the fast-food chain are urging the company to replace its CEO and remake its upper management team, including hiring a head of marketing. The group that represents about 89 percent of Jack in the Box’s 2,200 locations says its resources have been cut in recent years, hurting training and remodeling efforts and leading to a loss of confidence in company leadership.
“We really need change,” said Michael Norwich, chairman of the National Jack in the Box Franchisee Association. “Nobody is taking ownership and it’s resulting in the condition we’re in now.”
Comparable sales at Jack in the Box rose just 0.5 percent last year, trailing its burger peer group average of 1.5 percent, according to Bloomberg Intelligence data. Still, that marks a turnaround after several quarters of slipping sales — and Comma said in August that the positive momentum is continuing into the current quarter.
Lately, the chain, known for its late-night fare, said it’s been losing some budget-conscious customers to rivals including Taco Bell and Carl’s Jr. that are offering steep discounts. In August, Comma said the company was trying to do more deals under $5.
Now, Jack in the Box restaurants are advertising rib-eye burgers, but some recent campaigns have been flops, said Norwich, who owns 14 restaurants. Franchisees said they were stuck with barbecue sauce after the chain’s Smoky Jack burger didn’t sell like the company expected. Jack’s Food Truck Series of sandwiches were also a disappointment, he said.
The company’s “primary impetus has been going asset-lite,” Norwich said, citing corporate layoffs. “We want to see focus on the top line sales number.”
Comma, who also serves as chairman, has been CEO of Jack in the Box since January 2014, and was chief operating officer before that. Recently, chief marketing officer Iwona Alter left the company.
The association recently hired franchise attorney Robert Zarco to represent its interests. The majority of franchisee members gave the company’s executive team a “no confidence” vote at the group’s annual meeting in July, it said.
©2018 Bloomberg L.P.