Jack in the Box Inc. on Monday said it is exploring a range of financial strategies to maximize shareholder value, including a possible sale of the San Diego-based burger company.
In a brief regulatory filing, Jack in the Box said it “has had discussions with potential buyers; however, it noted that there can be no assurance that the exploration of strategic and financing alternatives will result in a transaction.”
“In the absence of a strategic transaction,” Jack in the Box said it will move forward with its previously announced plan “to have a new capital structure in place by the end of the first half of fiscal 2019. That capital structure could include, among other things, a securitization or bond issuance.”
The company said it would not comment any further.
The announcement comes amid growing unrest among a majority of the chain’s franchisees. The National Jack in the Box Franchisee Association issued a vote of no confidence of CEO Leonard Comma this year.
The group, which represents franchise owners who operate about 2,000 of the brand’s more than 2,200 restaurants, have also filed a complaint with California regulators about the chain’s recent restructuring of its real estate portfolio. The restructuring was being done reportedly to increase the chain’s credit worthiness and to secure new financing.
A potential sale of the company comes the same year Jack in the Box unloaded Qdoba in a $305 million cash deal with Apollo Global Management. That transaction ended the burger chain’s 15-year ownership of the fast-casual Mexican brand.
The sale was aimed at enhancing shareholder value, while allowing the brand to focus solely on its own asset-light business, which continues to stumble.
In its latest quarter, ended Sept. 30, Jack in the Box reported a 0.5-percent increase in systemwide same-store sales. Total revenue for the quarter declined to $177.5 million compared to $232.1 million for the same quarter last year.
In conference calls with investors, the company said it would be experimenting with streamlined menus, adding new equipment, focusing on value bundles and overhauling its drive-thrus to increase same-store sales.
Shares of Jack in the Box jumped as much as 6 percent early Monday on news of the company’s sale.
Contact Nancy Luna at [email protected]
Follow her on Twitter: @fastfoodmaven