In October, Jack in the Box announced its new “CRAVED” model—which stands for “Cultural, Relevant, Authentic, Visible, Easy, and Distinctive”—with a new restaurant opening in Tulsa, Oklahoma at only 1,350 square feet, less than half the size of Jack’s typical dine-in restaurants. The new prototype features a double Y-lane drive-thru and pickup window, no interior seating to lower building costs, dual assembly kitchens, and exclusive parking for mobile and third-party delivery orders—sound familiar?
The brand also brought a more modern design and color palette to its restaurant of the future with warm wood tiles, natural concrete waiting blocks, graphic poster panels, white cube tiles, and upgraded lighting and landscaping.
“This was only the beginning of how we will continue to evolve both brands through the shared model,” Harris notes.
The goal of the new prototype was to reduce buildout costs by 18 to 23 percent while also increasing real estate flexibility, says Tim Linderman, chief development officer at Jack in the Box. The model is designed for free-standing locations, but can also be adapted to fit in a variety of spaces such as C-stores, travel plazas, and end-cap locations. The design is also meant to attract franchisees, both new and existing.
“With our drive-thru sales skyrocketing amid the pandemic which accounted for 85 percent or more of a store’s sales, we needed a new prototype that would align with evolving consumer preferences,” Linderman says. Before COVID, drive-thru accounted for about 70 percent of sales. “We believe that off-premises will remain a preferred method of consumption for many of our guests and we want to ensure we are meeting and exceeding their expectations.”
In November, Jack in the Box revealed plans to sell at least 250 company-owned Del Taco restaurants—about half of the system’s footprint—to prospective and current franchisees. The move to refranchise Del Taco will help the burger chain land more securitized debt, financed by royalty fees from owners. To assist in the effort, Jack partnered with The Cypress Group, a restaurant and franchise investment banking firm with more than 30 years of multi-unit M&A and restaurant refranchising experience.
While Jack in the Box’s franchise footprint previously comprised about 93 percent of its system, the combined ownership shifted owner-operated units to about 84 percent. The refranchising plan will aid in Jack in the Box’s goal to get back to its previous ratio of company and franchise locations. An asset-light model should also help shield Jack in the Box from some inflationary-related pressures.
“Inflation is something that’s impacting everyone in the industry right now, so we’ve become more disciplined in our pricing strategy and are investing in the right technology to support that,” Harris says. “Partnering with our supply chain vendors to meet these challenges head on has been key to ensure those relationships remain steady for continuity sake.”
Tech trials and innovation
As labor woes impacted the entire restaurant industry, Jack in the Box began trying out an innovative solution in April by hiring a robot at its San Diego location. The burger chain tested Miso Robotics’ fry-cooking robot Flippy 2, which uses AI to identify and pick up food, then cook it in the correct fry basket. Miso estimates the robot increases throughput by 30 percent, or roughly 60 baskets per hour. Jack also piloted Sippy, a POS-integrated robot that automatically dispenses beverages and seals cups.
“At the restaurant level, we’re continuing to test and perfect our robotics cooking technology and the flexibility of our location prototypes to stay on the leading edge of innovation in the [quick-service] space,” Harris says. “We are constantly looking for technology opportunities to drive performance. This could be done with expansion of Flippy, or through other pilot programs that ensure the restaurant operations provide a more seamless, quick and efficient experience for the customer.”
Jack hired chief information officer Doug Cook to enhance these efforts by improving AI and removing more costs from the P&L. Cook has more than 20 years of experience in this area, including at Pizza Hut and Sonic.
“Innovation is at the heart of Jack In the Box. We had to re-ignite that across all aspects of our business: marketing, development, operations,” Harris says.
An upgraded website, a mobile app update, and a new loyalty program—dubbed The Jack Pack, which has more than 2 million members—round out Jack’s recent digital advances.
“We recognized that our current system for our app and website was a barrier that we could improve upon,” adds Ryan Ostrom, chief marketing officer at Jack in the Box. “As such, we partnered with Bounteous to launch a new ordering website and mobile app that integrates with our loyalty program.”
Partnerships are paramount
Partnerships are a key area quick-service restaurants are leaning into to drive interest and sales from younger consumers, especially with athletes and other well-known public figures. McDonald’s collaborated with K-pop group BTS for both signature meals with special dipping sauces and merchandise last year, for example.
In July, Jack in the Box partnered with Star Wars actor Mark Hamill to highlight the launch of French Toast Sticks, returning to the brand’s menu after a 10-year hiatus. The sweet, vanilla-battered product starts at $2 and comes in three or six pieces, or as part of the Jumbo Breakfast Platter. And unlike other competitors in the space, there isn’t an 11 a.m. deadline for customers to order the breakfast item.