What changed in this filing

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Item 1A. Risk Factors

2024-11-21 compared with 2023-11-21 · 24 added, 28 removed, 363 unchanged (13% of the section changed)

3 unchanged sentences

Risks Related to Macroeconomic and Industry Conditions

The COVID-19 pandemic has disrupted and may continue to disrupt our business, which has affected and could continue to materially affect our operations, financial condition, and results of operations for an extended period of time.

The COVID-19 pandemic outbreak, federal, state and local government responses to COVID-19 and our responses to the outbreak have all disrupted and may continue to disrupt our business.

Our operating results substantially depend upon our sales volumes, restaurant profitability, and financial stability, and to the extent we and/or our franchisees experience financial distress due to the COVID-19 pandemic, our operating results may be adversely impacted, potentially materially affecting our liquidity, financial condition, or results of operations.

Our business has been disrupted and could be further disrupted to the extent our suppliers, distributors, and/or third-party delivery partners are adversely impacted by the COVID-19 pandemic.

If our suppliers, distributors, and/or third-party delivery partners experience labor shortages or their employees are unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, we could face cost increases, shortages of food items, shortages of delivery services, and/or shortages of other supplies across our restaurants, and our results could be adversely impacted by such interruptions.

The COVID-19 outbreak also may have the effect of heightening many other risks disclosed herein, including, but not limited to, those related to consumer confidence, increase in food and commodity costs, supply chain interruptions, labor availability and cost, cybersecurity incidents, increased indebtedness, regulatory and legal complexity, governmental regulations, and our stock price.

Changes in the availability of and the cost of labor could adversely affect our business.

1 unchanged sentence

increased health care and workers’ compensation insurance costs;

increased wages and costs of other benefits necessary to attract and retain high quality employees with the right skill sets and increased wages, benefits and costs related to the COVID-19 pandemic and inflationary and other pressure on wages now being experienced.

increased wages and costs of other benefits necessary to attract and retain high quality employees with the right skill sets and increased wages, benefits and costs and inflationary and other pressure on wages now being experienced.

The growth of our business can make it increasingly difficult to locate and hire sufficient numbers of employees, to maintain an effective system of internal controls, and to train employees to deliver a consistently high-quality product and customer experience, which could materially harm our business and results of operations.

Furthermore, we have experienced, and could continue to experience, a shortage of labor for restaurant positions, including due to concerns around and illnesses arising from COVID-19 and its various novel variants and other factors, which could decrease the pool of available qualified

talent for key functions and require restaurants to operate on reduced hours.

In addition, our wages and benefits programs may be insufficient to attract and retain the top performing employees especially in a rising wage market.

7 unchanged sentences

The impact of these factors may be exacerbated by the geographic profile of our brands.

Specifically, nearly 70% of our systemwide restaurants are located in the states of California and Texas.

Specifically, approximately 70% of our systemwide restaurants are located in the states of California and Texas.

Economic conditions, state and local laws, or government regulations affecting those states may therefore more greatly impact our results than would similar occurrences in other locations.

23 unchanged sentences

In addition, if any of our distributors, suppliers, vendors, or other contractors fail to meet our quality or safety standards or otherwise do not perform adequately, or if any one or more of them seeks to terminate its agreement or fails to perform as anticipated, or if there is any disruption in any of our distribution or supply relationships or operations for any reason, our business reputation, financial condition, and results of operations may be materially affected.

The COVID-19 pandemic outbreak, federal, state and local government responses to COVID-19 and our responses to the outbreak have all disrupted and may continue to disrupt our business.

Our business has been disrupted and could be further disrupted to the extent our suppliers, distributors, and/or third-party delivery partners are adversely impacted by the COVID-19 pandemic.

Risks Related to Human Capital

66 unchanged sentences

If systemic or widespread adverse changes in climate or weather patterns occur, we could experience more severe impact, which could have a material adverse effect on our financial results.

The impact of these factors may be exacerbated by our geographic profile, as nearly 70% of our restaurants are located in the states of California and Texas.

The impact of these factors may be exacerbated by our geographic profile, as approximately 70% of our restaurants are located in the states of California and Texas.

Risks Relating to Health and Safety

26 unchanged sentences

• negative impact of delays due to longer timelines for permit review and field inspections with the municipal agencies;

• negative impact of delays due to longer than usual design, permitting, approval, procurement, and field installation timelines for utility service providers to supply primary services on new restaurant development projects (i.e.

electrical, gas, sewer, water, etc.)

• the inability to identify, or the unavailability of suitable sites at acceptable cost and other leasing or purchase terms;

9 unchanged sentences

Our inability to expand in accordance with our plans or to manage the risks associated with our growth could have a material adverse effect on our results of operations and financial condition.

Our business and Del Taco’s business may not be integrated successfully, or such integration may be more difficult, time consuming, or costly than expected.

Operating costs, customer loss, and business disruption, including difficulties maintaining relationships with employees, customers, suppliers or vendors, may be greater than expected.

The combination of two independent businesses can be complex, costly, and time-consuming, and it may divert significant management attention and resources to combining ours and Del Taco’s business practices and operations.

The continued integration of the Jack in the Box and Del Taco businesses may be more difficult, time consuming, or costly than expected.

The combination of two independent businesses can be complex, costly, and time-consuming, and it may divert significant management attention and resources.

This process may disrupt our business or otherwise impact our ability to compete.

The failure to meet the challenges involved in combining ours and Del Taco’s business and to realize the anticipated benefits of the acquisition could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations.

The overall combination of ours and Del Taco’s business may also result in material unanticipated problems, expenses, liabilities, competitive responses and impacts, and loss of customer and other business relationships.

The difficulties of combining the operations of the companies, include, among others:

• diversion of management attention to integration matters;

The failure to realize the anticipated benefits of integrating the two businesses could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations.

The overall combination of the Jack in the Box and Del Taco businesses may also result in material unanticipated problems, expenses, liabilities, competitive responses and impacts, and loss of customer and other business relationships.

The difficulties of combining the operations include, among others:

• difficulties in integrating operations and systems, including intellectual property and communications systems, administrative and information technology infrastructure, supplier and vendor arrangements and financial reporting and internal control systems;

• challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies;

• differences in control environments and cultures, and the potential identification of material weaknesses while we work to integrate and align policies, principles and practices;

• challenges in conforming standards, controls, procedures and accounting policies and business cultures;

• differences in control environments and cultures;

• difficulties in integrating and aligning policies, principles and practices;

• alignment of key performance measurements may result in a greater need to communicate and manage clear expectations while we work to integrate and align policies and practices;

• difficulties in integrating employees and attracting and retaining key personnel;

• the transition to a combined management team, and the need to address possible differences in corporate cultures and management philosophies;

• challenges in retaining existing customers and obtaining new customers;

5 unchanged sentences

Our highly-franchised business model presents a number of risks, and the failure of our franchisees to operate successful and profitable restaurants could negatively impact our business.

As of October 1, 2023, approximately 94% of our Jack in the Box restaurants and 71% of Del Taco restaurants were franchised;

As of September 29, 2024, approximately 93% of our Jack in the Box restaurants and 78% of Del Taco restaurants were franchised;

therefore, our success increasingly relies on the financial success and cooperation of our franchisees, yet we have limited influence over their operations.

73 unchanged sentences

Franchising Activities

Our franchising activities are subject to federal regulations administered by the U.S.

Our franchising activities in the United States are subject to federal regulations administered by the U.S.

Federal Trade Commission, laws enacted by a number of states, and rules and regulations promulgated by the U.S.

2 unchanged sentences

Such laws impose registration and disclosure requirements on franchisors in the offer and sale of franchises and may also apply substantive standards to the relationship between franchisor and franchisee, including limitations on the ability of franchisors to terminate franchises and alter franchise arrangements.

We also have franchising activities in Mexico, which are subject to regulations in that jurisdiction.

Failure to comply with new or existing franchise laws, rules, and regulations in any jurisdiction or to obtain required government approvals could negatively affect our ability to grow or expand our franchise business and sell franchises.

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We franchise our brands to various franchisees.

While we try to ensure that the quality of our brands are maintained by all franchisees, we cannot assure that all franchisees will uphold brand standards so as not to harm the value of our intellectual property or our reputation.

While we try to ensure that the quality of our brands is maintained by all franchisees, we cannot assure that all franchisees will uphold brand standards so as not to harm the value of our intellectual property or our reputation.

We are subject to increasing legal complexity and may be subject to claims or lawsuits that are costly to defend and could result in our payment of substantial damages or settlement costs.

72 unchanged sentences

Such indebtedness, along with the other contractual commitments of our Company or its subsidiaries, could adversely affect our business, financial condition and results of operations, as well as the ability of certain of our subsidiaries to meet debt payment obligations.

Under the Indenture, the Master Issuer has approximately $1.8 billion of outstanding debt as of October 1, 2023.

Under the Indenture, the Master Issuer has approximately $1.7 billion of outstanding debt as of September 29, 2024.

This level of debt could have certain material adverse effects on the Company, including but not limited to:

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As a result of these restrictions, we may not have adequate resources or the flexibility to continue to manage the business and provide for growth of the Jack in the Box system, including product development and marketing for the Jack in the Box brand, which could adversely affect our future growth prospects, financial condition, results of operations and liquidity.

UNRESOLVED STAFF COMMENTS

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 1A. Risk Factors