Jack In The Box 2015 Annual Report Download - page 8

preparation cycle. The U.S. Department of Agriculture, FDA and the Center for Science in the Public Interest have recognized our HACCP-based program as a
leader in the industry. In addition, our food safety management program uses American National Standards Institute certified food safety training programs to
train our company and franchise restaurant management employees on food safety practices for our restaurants.
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Historically, we provided purchasing and distribution services for our company-operated restaurants and most of our franchise-operated restaurants. Our
remaining franchisees purchased product from approved suppliers and distributors. In fiscal 2012, all of our company-operated Qdoba restaurants and
approximately 90% of our Qdoba franchisees began utilizing the distribution services of a third-party distributor under a long-term contract, ending February
2017.
In July 2012, all of our Jack in the Box company-operated restaurants and approximately 90% of our Jack in the Box franchisees entered into a long-term
contract with another third-party distributor to provide distribution services to our Jack in the Box restaurants through August 2022. In the fourth quarter of
fiscal 2012, we completed the transition of services from one distribution center and our remaining centers were transitioned by the end of the first quarter of
fiscal 2013. Since June 2015, the remaining 10% of our Jack in the Box franchisees have utilized the same third-party distributor under the same long-term
contract agreement.
The primary commodities purchased by our 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 we may enter into purchasing contracts and pricing arrangements when we consider
them advantageous. However, certain commodities remain subject to price fluctuations. We believe all essential food and beverage products are available, or
can be made available, upon short notice from alternative qualified suppliers.
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At our shared services corporate support center, we have centralized financial accounting systems, human resources and payroll systems, and a
communications and network infrastructure that supports both Jack in the Box and Qdoba corporate functions. Our 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. These platforms allow the restaurants to accept cash, credit cards and our re-loadable gift cards.
Our Qdoba POS system is also enhanced with an integrated guest loyalty program as well as a takeout and delivery interface. The takeout and delivery
interface is used to manage online and catering orders which are distributed to sites via a hosted online ordering website.
We have developed business intelligence systems that provide visibility to the key metrics in the operation of company and franchise restaurants. These
systems play an integral role in accumulating and analyzing market information. Our company restaurants use labor scheduling systems to assist managers in
managing labor hours based on forecasted sales volumes. We also have inventory management systems which enable timely and accurate deliveries of food
and packaging to our restaurants. To support order accuracy and speed of service, our drive-thru Jack in the Box restaurants use color order confirmation
screens. We are currently engaged in a comprehensive review of our restaurant level technologies at Jack in the Box and Qdoba to identify opportunities to
integrate systems across both of our brands.
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Jack in the Box. At Jack in the Box, we build brand awareness through our marketing and advertising programs and activities. These activities are
supported primarily by financial contributions to a marketing fund from all company and franchise restaurants based on a percentage of gross sales. Activities
to advertise restaurant products, promote brand awareness and attract customers include, but are not limited to, system and regional campaigns on television,
radio and print media, as well as digital and social media.
Qdoba. At Qdoba, the goal of our advertising and marketing efforts is to build brand awareness and generate traffic, and we seek to build brand advocates
by delivering a great guest experience in the restaurants. All restaurants contribute a small percentage of gross sales to a fund primarily used for production
and development of radio and print media, as well as digital and social media. Advertising is primarily done at the regional or local level for both company
and franchise owned and operated restaurants, and is determined by the local management. Advertising is created at the brand level and the system operators
can utilize these assets, or tap into our in-house creative services group to create custom advertising that meets their particular communication objectives
while adhering to brand standards.
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