What changed in this filing

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Item 1. Business

2024-11-21 compared with 2023-11-21 · 45 added, 50 removed, 135 unchanged (41% of the section changed)

Jack in the Box Inc.

JACK), a Delaware corporation (the “Company” or “Jack in the Box”), founded and headquartered in San Diego, California, is a restaurant company that operates and franchises Jack in the Box®, one of the nation's largest hamburger chains with approximately 2,200 restaurants across 22 states, and Del Taco®, the second largest Mexican-American quick service restaurants (“QSR”) chain by units in the U.S.

with approximately 600 restaurants across 16 states.

On March 8, 2022, the Company acquired Del Taco Restaurants, Inc.

(“Del Taco”) for cash according to the terms and conditions of the Agreement and Plan of Merger, dated as of December 5, 2021.

As a result, Del Taco became a wholly-owned subsidiary of Jack in the Box.

JACK), a Delaware corporation (the “Company” or “Jack in the Box”), founded and headquartered in San Diego, California, is a restaurant company that operates and franchises Jack in the Box®, one of the nation's largest hamburger chains with approximately 2,200 restaurants across 22 states, and Del Taco®, one of the nation’s largest Mexican-American quick service restaurants (“QSR”) chains with approximately 600 restaurants across 17 states.

References to the Company throughout this Annual Report on Form 10-K are made using the first person notations of “we”, “us” and “our.”

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Jack in the Box.

Jack in the Box restaurants offer a broad selection of distinctive products including classic burgers like our Jumbo Jack ® and innovative product lines such as Buttery Jack ® burgers.

We also offer quality products such as breakfast sandwiches with freshly cracked eggs, as well as craveable favorites such as tacos, curly fries, egg rolls, specialty sandwiches and real ice cream shakes, among many other items.

We allow our guests to customize meals to their tastes and order any product on the menu when they want it, including breakfast at night, or burgers and chicken in the morning.

Our trademark of variety and innovation has led to the development of five true day parts:

Jack in the Box restaurants offer a broad selection of distinctive products including classic burgers like its Jumbo Jack ® and innovative product lines such as the Buttery Jack ® and Smash Jack ® burgers.

Jack in the Box also offers quality products such as breakfast sandwiches with freshly cracked eggs, as well as craveable favorites such as tacos, curly fries, egg rolls, specialty sandwiches and real ice cream shakes, among many other items.

Jack in the Box allows its guests to customize meals to their tastes and order any product on the menu when they want it, including breakfast at night, or burgers and chicken in the morning.

The Jack in the Box trademark of variety and innovation has led to the development of five true day parts:

breakfast, lunch, snack, dinner, and late night.

Jack in the Box opened its first restaurant in 1951 and has since become one of the nation’s largest hamburger chains.

Based on number of restaurants, our top 10 major markets comprise approximately 70% of the total system, and Jack in the Box is at least the third largest QSR hamburger chain in each of those major markets.

As of October 1, 2023, we operated and franchised 2,186 Jack in the Box quick-service restaurants, primarily in the western and southern United States, including two in Guam.

Of the 2,186 restaurants at fiscal year-end, 2,044, or 94%, were franchised.

Del Taco offers a unique variety of both Mexican and American favorites such as burritos and fries, prepared fresh in every restaurant's working kitchen with the value and convenience of a drive-thru.

Based on number of restaurants, the top 10 major markets of Jack in the Box comprise approximately 70% of the total system, and Jack in the Box is at least the third largest QSR hamburger chain in each of those major markets.

As of September 29, 2024, Jack in the Box operated and franchised 2,191 quick-service restaurants, primarily in the western and southern United States, including two in Guam and two in Mexico.

Of those total Jack in the Box restaurants at fiscal year-end, 2,041, or 93%, were franchised.

Del Taco offers a unique variety of both Mexican and American favorites such as burritos and fries, prepared fresh in every restaurant's kitchen with the value and convenience of a drive-thru.

Del Taco's menu items taste better because they are made with quality ingredients like freshly grilled chicken and carne asada steak, fresh house-made guacamole, freshly grated cheddar cheese, slow-cooked beans made from scratch, and creamy Queso Blanco.

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Del Taco’s commitment to providing guests with the best quality and value for their money originates from cooking, chopping, shredding, and grilling menu items from scratch.

As of October 1, 2023, we operated and franchised 592 Del Taco restaurants across 16 states.

Of the 592 restaurants at fiscal year-end, 421, or 71%, were franchised.

As of September 29, 2024, Del Taco operated and franchised 594 restaurants.

Of those total Del Taco restaurants at fiscal year-end, 461, or 78%, were franchised.

Business Strategy

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• Grow Restaurant Profits by developing and implementing financial fundamentals, influencing pricing with a dynamic model, and building our data advantage.

• Expand Our Brands Reach by creating modular and flexible restaurant designs, building company-operated stores to help seed growth, fostering growth capital, and increasing franchise candidate and restaurant site lead generations.

• Expand Our Brands Reach by creating modular and flexible restaurant designs, building company-operated stores to help seed growth, and increasing franchise candidate and restaurant site lead generations.

This strategy builds on our historical strengths with our Jack in the Box and Del Taco differentiated, challenger brands.

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Del Taco Refranchising Strategy

In fiscal year 2023, we embarked on our refranchising strategy with three main intentions.

In fiscal year 2024, we continued our refranchising strategy with three main intentions.

First, to create a company-wide asset-light model that will benefit from mitigating exposure to macroeconomic pressures;

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Our objective is to be asset-light as we navigate market forces.

We refranchised 111 Del Taco restaurants in fiscal year 2023, and added 109 new Del Taco development commitments as a result of the refranchising effort, across both brands.

Throughout 2024, we will continue to adjust the rate, pace and sequence of our refranchising efforts to balance the impact to earnings, as we await accelerated new unit openings from incremental development and natural general and administrative reductions.

We refranchised 47 Del Taco restaurants in fiscal year 2024, and 111 Del Taco restaurants in 2023.

In connection with the 2024 refranchising, we added 42 new development commitments.

Throughout 2025, we will continue refranchising and adjust the rate, pace and sequence of those efforts to balance the impact to earnings.

Franchising Program

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Developers may lose their rights to future development if they do not maintain the required opening schedule.

To stimulate growth, we have offered an incentive program that provides discounted royalty fees for new franchisees who maintain development compliance and sign a Development Agreement for a minimum of three restaurants to be developed and opened under the development schedule during the timeframe specified under the Development Agreement.

To stimulate growth, we have offered an incentive program that provides discounted royalty fees for franchisees who maintain development compliance and sign a Development Agreement for a minimum of three restaurants to be developed and opened under the development schedule during the timeframe specified under the Development Agreement.

The franchise agreement provides for an initial franchise fee of $35,000 per restaurant for a 20-year term, and royalty and marketing payments generally set at 5.0% and 4.0%, respectively, of gross sales.

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New restaurants developed by franchisees are built to brand standards that we have approved.

Jack in the Box.

Jack in the Box offers multiple restaurant designs that feature different configurations and dining room sizes to provide maximum flexibility when considering properties for development.

Jack in the Box offers three prototypical “CRAVED” image restaurant designs, and Del Taco offers three prototypical “Fresh Flex” image restaurant designs, each that feature the same kitchen engine but different dining room configurations to provide maximum flexibility when considering properties for development.

This flexibility enables the Company and franchisees to optimize the layout and configuration of a new restaurant with the property’s specific economic, demographic, geographic, or physical characteristics.

Jack in the Box offers an off-premise-only restaurant, which is designed to meet the continued increasing demand for drive-thru service and digital ordering.

At only 1,350 square feet, the restaurant features a double Y-lane drive-thru, a walk-up window for ordering, dual assembly kitchens and a dedicated pick-up window for mobile and third-party delivery orders.

The goal of this design is to reduce build out costs by around 20%, while also increasing real estate flexibility.

The model is designed for free-standing locations but can be adapted to fit in a variety of spaces such as C-stores, travel plazas, and end-cap locations.

A typical Del Taco restaurant is a free-standing building with drive-thru service that ranges in size from 2,000 to 2,600 square feet.

Del Taco also has the ‘Fresh Flex’ design, which offers multiple build out options, including small footprint drive-thru only sites with no dining rooms, that range in size from 1,200 to 2,400 square feet.

With innovative additions like third-party pick-up stations and double drive-thru lanes with a dedicated lane for mobile orders and delivery pickups, the future-focused model optimizes operational efficiencies and caters to modern consumers' expectations.

Included in the prototype offering is an off-premise-only restaurant, which is designed to meet the continued increasing demand for drive-thru service and digital ordering.

The prototype portfolios are designed for free-standing locations but can be adapted to fit in a variety of spaces such as conversions, c-stores, travel plazas, and end-cap locations.

The Jack in the Box restaurants are approximately 1,372 square feet, the restaurant can support a Y-Lane drive-thru configuration, provides a walk-up window for ordering, dual assembly kitchens, and a dedicated pick-up window for mobile and third-party delivery orders.

The goal of this design is to reduce build out costs, while also increasing real estate flexibility.

In addition, an approximate 2,003 square foot, 22-seat dining room building, and an approximate 2,450 square foot 50-seat dining room building designs are available.

The Del Taco restaurants are approximately 1,152 square feet, the restaurant can support a Y-Lane drive-thru configuration, provides a walk-up window for ordering and a dedicated pick-up window or lockers for mobile and third-party delivery orders.

The goal of this design is to reduce build out costs, while also increasing real estate flexibility.

In addition, an approximate 2,021 square-foot, 34-seat dining room building, and an approximate 2,304 square-foot 48-seat dining room building designs are available.

Restaurant Management and Operations

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Restaurant managers and supervisory personnel train other restaurant employees in accordance with detailed procedures and guidelines using training aids available at each location.

General managers, shift managers and team leaders are certified through a series of online and on the job training modules.

Restaurant managers, assistant managers, shift managers and team leaders are certified through a series of online and on the job training modules.

Every team member receives training modules focused on helping the team member clearly understand the brand and their role as well as modules focusing on the specifics of how to provide a consistent customer experience, how to complete specific tasks for their assigned position and ensure food safety.

The training program is a blended learning approach including e-learning courses, hands-on exercises, and online knowledge validation tests.

Before certification, shift managers attend a 2-hour virtual training, assistant managers attend a 1-day in person class and general managers attend a 2 day in-person class, all led by the training department or certified trainer.

Our “farm-to-fork” food safety program is designed to maintain high standards for the food products and food preparation procedures used by our vendors and in our restaurants.

We maintain product specifications for our ingredients and our Food Safety and Regulatory Compliance Department must approve all suppliers of food products to our restaurants.

We maintain product specifications for our ingredients and our Food Safety and Technical Services Department must approve all suppliers of food products to our restaurants.

We use third-party and internal audits to review the food safety management programs of our vendors.

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At both brands, we contract with a single primary food service distributor for substantially all of our food and supplies.

Jack in the Box is in the second year of a five-year contract with their distributor.

Under the contract, this distributor will provide distribution services to our Jack in the Box restaurants through July 2027.

Our Del Taco brand contracts with the same distributor and provides distribution services to our Del Taco restaurants through December 2023.

Additionally, Del Taco is in the final stages of executing a long-term extension with this same distributor through September of 2028.

Under the current contracts, this distributor will provide distribution services to both our Jack in the Box and Del Taco restaurants through August 2027.

The primary commodities purchased by Jack in the Box restaurants are beef, poultry, pork, cheese, and produce.

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Our Jack in the Box and Del Taco restaurant software allows for daily polling of sales, inventory, and other data from the restaurants directly.

Our company restaurants and traditional-site franchise restaurants use standardized Windows-based touch screen point-of-sale (“POS”) platforms.

Our company restaurants and traditional-site franchise restaurants use standardized Android and Windows-based touch screen point-of-sale (“POS”) platforms.

These platforms allow the restaurants to accept cash, credit cards, and our re-loadable gift cards.

The single POS system for all restaurants helps franchisees and brand managers adapt more quickly to meet consumer demands and introduce new products, pricing, promotions, and technologies such as the Jack in the Box and Del Taco mobile apps, third party delivery, or any other business-driving initiative while maintaining a secure, PCI-compliant payment system.

We also provide an ordering website and integrated mobile app featuring a full array of capabilities including full menu ordering, customization options, location finder, product and restaurant information, flexible delivery or pickup options and an integrated loyalty program.

We have business intelligence systems that provide us with visibility to the key metrics in the operation of Jack in the Box and Del Taco company and franchise restaurants.

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Advertising and Promotion

Our brands run a highly coordinated marketing and advertising campaigns to create customer awareness, engage fans, and maximize positive brand associations.

Our brands run highly coordinated marketing and advertising campaigns to create customer awareness, engage fans, and maximize positive brand associations.

We build brand awareness and drive sales through our marketing and advertising programs.

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We may utilize local radio, print, internet advertising, and billboards for some of the less developed markets, reaching consumers through our branded mobile app and delivery partnerships.

Competition and Markets

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Human Capital Management

Jack in the Box and Del Taco recognizes and takes care of their employees by offering a wide range of competitive pay, recognition, and benefit programs.

We are proud to provide our employees, many who begin their career in our restaurants as their first entry-level job, the opportunity to grow and advance as we invest in their education and career development.

As of October 1, 2023, for our combined brands, we had 9,523 employees, of whom 8,888 were restaurant employees, 542 were corporate management and staff, and 93 were field operations management.

Most of our employees are paid on an hourly basis, except manager, field operations management, and certain corporate positions.

Jack in the Box and Del Taco recognizes and takes care of its employees by paying competitive wages and offering a wide range of benefits and recognition programs.

We are proud of our employees, many who began their career in our restaurants as their first entry-level job, are given the opportunity to grow and advance their careers as we invest in their education and career development.

As of September 29, 2024, for our combined brands, we had 8,168 employees, of whom 7,542 were restaurant employees, 571 were corporate management and staff, and 55 were field operations management.

Most of our employees are paid on an hourly basis, except for district and restaurant managers, and certain restaurant support center management and staff positions.

We employ both full-time and part-time restaurant employees in order to provide the flexibility necessary during peak periods of restaurant operations and meet the individual needs of our employees.

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Our Total Rewards framework includes pay and recognition, health and wellness, financial well-being, work/life happiness, culture and community, and learning and development.

We are committed to providing employees with market-competitive pay and benefits and flexibility with respect to benefit choices.

For our company-operated restaurant positions nationwide, positions are assigned to a pay range that best reflects market pricing of similar jobs in the restaurant industry and in the geographic location, and employees receive an automatic pay increase each time they work a certain number of hours provided performance is satisfactory.

All corporate positions, field operations management, and restaurant management positions, including hourly assistant managers and team leaders, are eligible for performance-based cash incentives.

We take care in providing employees with market-competitive pay and benefits and flexibility with respect to benefit choices.

For our company-operated restaurant positions nationwide, positions are assigned to a pay range that best reflects geographic market pricing of similar jobs in the restaurant industry, and additionally for restaurants in CA, pay requirements under AB 1228 regulation.

Employees’ pay is reviewed annually.

All restaurant support center positions, and restaurant management positions, including hourly assistant managers and team leaders, are eligible for performance-based cash incentives.

Each incentive plan reinforces and rewards individuals for achievement of specific company and/or restaurant business goals.

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We share the median pay of our male and female employees in various position classifications with the Board of Directors, and we take remedial action as appropriate to ensure pay equity is maintained.

We are committed to providing market-competitive, high-quality, and affordable benefits to meet the changing needs of our employees.

We offer a robust benefits package that includes medical, dental, and vision insurance with health savings account (HSA) employer contributions and an HMO plan;

We offer a robust benefits package that includes medical, dental, vision insurance and an HMO plan;

company-paid basic term life insurance;

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life and disability insurance;

flexible spending accounts (FSA);

flexible spending accounts (“FSA”) and health savings accounts (“HSA”) with employer contributions;

legal services;

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We are subject to certain guidelines under the Americans with Disabilities Act of 1990 and various state codes and regulations, which require restaurants and our brands to provide full and equal access to persons with certain mental or physical impairments.

Our collection or use of personal information about our employees or our guests is regulated at the federal and state levels, including the California Consumer Privacy Act.

Our marketing, advertising, and promotional programs are governed by various federal, state, and local laws and regulations concerning consumer protection, including the Telephone Consumer Protection Act.

Our collection or use of personal information about our employees or our guests is regulated at the federal and state levels, including the California Consumer Privacy Act (“CCPA”) and the California Privacy Rights Act (“CPRA”) and other similar state and federal laws.

We are also subject to various federal, state, and local laws regulating the discharge of materials into the environment.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business