Jack In The Box 2006 Annual Report Download - page 23

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Regardless of whether we provide distribution services to a restaurant or not, we require that all suppliers meet
our strict HACCP program standards previously discussed. The primary commodities purchased by the restaurants
are beef, poultry, pork, cheese and produce. We monitor the primary commodities we purchase in order to minimize
the impact of fluctuations in price and availability, and make advance purchases of commodities when considered to
be advantageous. However, certain commodities still remain subject to price fluctuations. All essential food and
beverage products are available, or can be made available, upon short notice from alternative qualified suppliers.
Information Systems
We have centralized financial and accounting systems for company-operated restaurants, which we believe are
important in analyzing and improving profit margins and accumulating marketing information for analysis. Our
restaurant satellite-enabled software allows for daily, weekly and monthly polling of sales, inventory and labor data
from the restaurants. JACK IN THE BOX restaurants use a standardized windows based touch screen POS platform
among all company and franchised restaurants, which allows us to accept credit cards and Jack’ s Cash re-loadable
gift cards. We have also developed several systems to assist restaurant managers in overseeing the daily operations
of their restaurants. We use an interactive computer-based training system in our JACK IN THE BOX restaurants as the
standard training tool for new hire training and periodic workstation re-certifications, and have a labor scheduling
system to assist in managing labor hours based on forecasted sales volumes. We also have a highly reliable
inventory management system, which provides consistent deliveries to our restaurants with excellent control over
food safety, and, to support order accuracy and speed of service, our drive-thru restaurants use order confirmation
screens. We are currently in the process of updating our order confirmation screens with new larger, color screens.
Qdoba restaurants use POS software with touch screens, accept debit and credit cards at all company-owned
locations and use back-of-the-restaurant software to control purchasing, inventory, food and labor costs. These
software products have been customized to meet Qdoba’ s operating standards.
Advertising and Promotion
The Company builds brand awareness through its marketing and advertising programs and activities. These
activities are supported primarily by contractual contributions from all company and franchised restaurants based on
a percentage of sales. We use regional and local campaigns on television, national cable television, radio and print
media, as well as Internet advertising on specific sites and broad-reach Web portals, to advertise restaurant products,
promote brand awareness and attract customers.
Employees
At October 1, 2006, we had approximately 44,300 employees, of whom 42,200 were restaurant employees,
1,000 were corporate personnel, 500 were distribution employees and 600 were field management and
administrative personnel. Employees are paid on an hourly basis, except most restaurant managers, operations and
corporate management, and certain administrative personnel. We employ both full and part-time restaurant
employees in order to provide the flexibility necessary during peak periods of restaurant operations.
Our vision is to build an organization of people who are passionate about creating a superior restaurant
experience for our guests by engaging our employees and providing them with great internal service. We have not
experienced any significant work stoppages and believe our labor relations are good. Over the last few years we
have realized improvements in our hourly restaurant employee retention rate and in 2005 we received the first
annual Spirit Award, an honor awarded by Nation’ s Restaurant News and the National Restaurant Association
Educational Foundation to the restaurant companies with the most innovative workforce programs for enhancing
employee satisfaction. We support our employees, including part-time workers, by offering competitive wages,
competitive benefits, including a pension plan and medical insurance for all of our employees meeting certain
requirements, and discounts on dining. Furthermore, in September 2004, JACK IN THE BOX began offering all hourly
employees meeting certain minimum service requirements access to health coverage, including vision and dental
benefits. As an additional incentive to crew members with more than a year of service, the Company will pay a
portion of their premiums. Late in fiscal 2005, we also introduced a program called “Sed de Saber” (Thirst for
Knowledge), an electronic home study program to assist Spanish-speaking restaurant employees in improving their
English skills. We expect these programs will further reduce turnover, as well as training costs and workers’
compensation claims. We also attempt to motivate and retain our employees by providing them with opportunities
for increased responsibilities and advancement, as well as performance-based cash incentives tied to sales,
profitability and certain qualitative measures.