Jack in the Box will close up to 200 underperforming restaurants as part of a restructuring program aimed at achieving sustainable growth – and is exploring options for its Del Taco brand.

The company has announced the “Jack on Track” plan, which focuses on improving long-term financial performance, strengthening the balance sheet and developing an asset-light business model.

The plan will include ‘block closure’, which is projected to result in the shutdown of 150-200 underperforming restaurants. Approximately 80-120 locations will close within this calendar year, while the remaining closures will be based on respective franchise agreement termination dates.

Upon completion, the company expects to deliver consistent, positive net unit growth, helped by the strong performance of new markets and whitespace opportunities.

Jack in the Box has also engaged BofA Securities to assist in exploring strategic alternatives for the Del Taco brand, including a possible divestiture of the business.

To accelerate cash flow, the company plans to sell a select number of owned real estate holdings and reduce its spend on new company-owned units starting next year. It will also discontinue its dividend and direct a majority of those funds toward debt paydown.

“In my time thus far as CEO, I have worked quickly with our teams to conclude that Jack in the Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” said Lance Tucker, who was named CEO on March 31. 

Jack in the Box has also announced some preliminary financial results for the second quarter ended April 13, with same-store sales of Jack in the Box segment down 4.4 per cent and Del Taco down 3.6 per cent.

For the full year, the company expects the Jack in the Box segment to record same-store sales of negative low-to-mid-single digits.