Jack in the Box Shrinks Footprint to Tackle Debt: Fast Food Chain's Turnaround Plan

• Jack in the Box is closing 150-200 underperforming restaurants by 2026 to reduce debt and streamline operations. According to reports.
• The fast food chain sold Del Taco for $115 million to focus on its core brand amid rising costs and sales declines. According to reports.
• Same-store sales fell 7.4% in Q4 2025 due to lower traffic and intense value competition. According to data.
• Activist investor Sardar Biglari has pressured management, prompting poison pill defenses. According to reports.

Jack in the Box is fighting for survival in a brutal fast food market. The 75-year-old chain announced sweeping closures of underperforming locations alongside its Del Taco divestiture. Management's 'Jack on Track' turnaround plan aims to stabilize operations amid falling customer visits and crushing debt. According to reports.

Why Is Jack in the Box Closing Hundreds of Fast Food Restaurants?

Rising costs and sinking sales forced drastic action. Beef inflation from drought-impacted cattle herds squeezed margins while core Hispanic customers reduced spending. According to reports Intense value wars with giants like McDonald's pressured Jack in the Box to launch $7 combo deals that further eroded profitability. According to analysis. These headwinds caused a 7.4% same-store sales plunge last quarter. According to reports.

The closures target 150-200 locations, mostly older restaurants with declining performance. According to reports. Executives believe shrinking the footprint will improve unit economics and free cash flow for debt reduction. Jack in the Box carries $1.7 billion in debt, according to financial analysis, a heavy burden amid deteriorating sales. That leverage ratio leaves little room for error in this competitive landscape.

Can Selling Del Taco Save This Struggling Fast Food Chain?

Divesting Del Taco generated $115 million to pay down obligations. According to reports. The sale came at a steep loss compared to the $575 million acquisition price in 2021. According to reports. While eliminating a growth engine, the move simplifies operations and acknowledges Del Taco's contribution to financial strain. According to analysis. Management contends focusing solely on the flagship brand is crucial for recovery.

Activist investor Sardar Biglari's 9.9% stake acquisition intensified pressure on leadership. According to reports. The board responded with a poison pill defense in July 2025. According to analysis. Analysts remain split on whether the strategy can succeed. Some project 2026 EBITDA recovery if closures proceed smoothly. According to analysis. Others warn franchise-heavy models may limit innovation while debt and commodity inflation persist. According to analysis. Jack in the Box must execute flawlessly to avoid terminal decline.