Jack In The Box 2011 Annual Report Download - page 23

Download and view the complete annual report

Please find page 23 of the 2011 Jack In The Box annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 89

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89

Table of Contents
• Commodity Costs. Pressures from higher commodity costs, which had moderated during 2010, impacted our business in fiscal 2011. Overall
commodity costs at Jack in the Box and Qdoba company restaurants increased approximately 4.7% and 7%, respectively, as compared to last
year.
• New Unit Development. We continued to grow our brands with the opening of new company and franchise-operated restaurants. In 2011, we
opened 31 Jack in the Box and 67 Qdoba locations system-wide.
• Franchising Program. We refranchised 332 Jack in the Box restaurants, while Qdoba and Jack in the Box franchisees opened a total of 58
restaurants in 2011. We achieved our goal of increasing the percentage of franchise ownership to 70-80% of the Jack in the Box system two years
ahead of our plan, and we were 72% franchised at the end of fiscal year 2011. We plan to further increase franchise ownership to approximately
80% over the next couple of years.
• Share Repurchases. Pursuant to share repurchase programs authorized by our Board of Directors, in 2011, we repurchased 9.1 million shares
of our common stock at an average price of $21.27 per share, including the cost of brokerage fees.
• Franchise Financing Entity. We formed an entity, Jack in the Box Franchise Finance, LLC (“FFE”), for the purpose of operating a franchisee
lending program used primarily to assist franchisees in re-imaging their restaurants. In 2011, FFE provided $14.5 million in loans to franchisees.
The impact of this entity on the Company’s consolidated financial statements as of and for the fiscal year ended October 2, 2011 was not
material.

The results of operations and cash flows for Quick Stuff, which was sold in 2009, are reflected as discontinued operations for all periods presented. Refer
to Note 2, Discontinued Operations, in the notes to our consolidated financial statements for more information.

The following table presents certain income and expense items included in our consolidated statements of earnings as a percentage of total revenues, unless
otherwise indicated. Percentages may not add due to rounding.
22