Jack in the Box's (JACK) Del Taco Unveils Fresh Flex Drive-Thru
Jack in the Box Inc.'s. JACK Del Taco unveils its first Fresh Flex Drive-Thru Only location in Albuquerque, NM. The initiative caters to today’s tech-savvy and ‘on the go’ consumer expectations.
The Fresh Flex design allows the company to reduce the overall footprint of the building, enhancing real estate flexibility and potentially reducing overall construction costs.
With a coverage of 1,200 square feet, the site boasts a compact footprint and features a diverse "Menu of Venues," encompassing options from drive-thru-only model to free-standing, end cap and converted locations.
It also improves the drive-thru efficiency with pick-up lockers catering to orders via the Del Taco mobile app and third-party delivery services. This strategic approach aligns with the company's aim to expedite brand growth.
More Focus On Del Taco
The acquisition of Del Taco has boosted Jack in the Box’s business growth. It is worth mentioning that 99% of the Del Taco restaurants have a drive-thru, which helps the company achieve robust off-premise sales.
During the third quarter, the company’s same-store sales rose 1.7% year-over-year, comprising franchise same-store sales growth of 1.8% and company-operated same-store sales growth of 1.7%. Notably, emphasis on solid value proposition and barbell menu strategy added to the positives.
The company emphasizes the Fresh Flex prototype as a catalyst for future system growth. It stated that the Fresh Flex restaurant in Orlando is performing well. The company awarded 13 new development agreements with new franchisees committing to 89 units across 12 states. As of third-quarter fiscal 2023, Del Taco signed 20 development agreements for 153 restaurants. For fiscal 2023, the company now expects to refranchise 90-120 Del Taco restaurants, up from the prior expectation of 65-85 restaurants.
Given the unit-expansion efforts and an emphasis on the Del Yeah! Rewards program, the company anticipates the initiatives to target guests better and drive average spend and frequency in the upcoming periods.
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Shares of JACK have increased 16.4% in the year-to-date period compared with the industry's 4.9% rise.
Zacks Rank and Key Picks
Jack in the Box carries a Zacks Rank #3 (Hold).
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