Jack In The Box 2008 Annual Report Download - page 12

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Strategic Plan — Improve the Business Model. This sweeping strategy involves all aspects of our organi-
zation to improve restaurant profitability and returns as JACK IN THE BOX transitions to a new business model
comprised of predominantly franchised restaurant locations. Our decision to sell our Quick Stuff convenience stores
supports our new business model as it will allow us to direct our resources and enable us to maximize the potential of
our JACK IN THE BOX and Qdoba brands. We will focus on reducing food, packaging and labor costs through product
design, menu innovation, and operations simplification, as well as pricing optimization. As the percentage of
franchised locations increases, we expect our selling, general and administrative expenses to continue to decrease as
we complete our refranchising strategy and continue reengineering our processes and systems.
Restaurant Concepts
JACK IN THE BOX.JACK IN THE BOX restaurants offer a broad selection of distinctive, innovative products
targeted primarily at the adult fast-food consumer. The JACK IN THE BOX menu features a variety of hamburgers,
salads, specialty sandwiches, tacos, drinks, smoothies, real ice cream shakes and side items. Hamburger products
include our signature Jumbo Jack», Sourdough Jack», Ultimate Cheeseburger and Jack’s 100% Sirloin Burger. JACK
IN THE BOX restaurants also offer premium entrée salads and specialty sandwiches to appeal to a broader customer
base, including more women and consumers older than the traditional QSR target market of 18-34 year old men.
Furthermore, JACK IN THE BOX restaurants offer value-priced products, known as “Jack’s Value Menu,” to compete
against price-oriented competitors and because value is important to certain fast-food customers. JACK IN THE BOX
restaurants also offer customers both the ability to customize their meals and to order any product, including
breakfast items, any time of the day. We believe that our distinctive menu has been instrumental in developing brand
loyalty and is appealing to customers with a broad range of food preferences. Furthermore, we believe that, because
of our diverse menu, our restaurants are less dependent than other QSR chains on the commercial success of one or a
few products.
The JACK IN THE BOX restaurant chain was the first major hamburger chain to develop and expand the concept of
drive-thru restaurants. In addition to drive-thru windows, most of our restaurants have seating capacities ranging
from 20 to 100 persons and are open 18-24 hours a day. Drive-thru sales currently account for approximately 70% of
sales at company-operated restaurants.
The following table summarizes the changes in the number of company-operated and franchised JACK IN THE
BOX restaurants since the beginning of fiscal 2004:
2008 2007 2006 2005 2004
Fiscal Year
Company-operated restaurants:
Opened .................................. 23 42 29 38 56
Sold to franchisees .......................... (109) (76) (82) (58) (49)
Closed ................................... (4) (5) (6) (5) (2)
Acquired from franchisees .................... — — — 1 —
End of period total .......................... 1,346 1,436 1,475 1,534 1,558
Franchised restaurants:
Opened .................................. 15 16 7 11 5
Sold to franchisees .......................... 109 76 82 58 49
Closed ................................... (8) — — (1) —
Acquired from franchisees .................... — — — (1) —
End of period total .......................... 812 696 604 515 448
System end of period total ...................... 2,158 2,132 2,079 2,049 2,006
Qdoba Mexican Grill. Qdoba restaurants use fresh, high quality ingredients and traditional Mexican flavors
fused with popular ingredients from other regional cuisines to give a unique “Nouveau-Mexican” taste to its broad
menu. A few examples of Qdoba’s unique flavors are its signature Poblano Pesto and Ancho Chile BBQ sauces.
While the great flavors start with the core philosophy of “the fresher the ingredients, the fresher the flavors
TM
”, our
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