Jack in the Box Looks for New CEO After Franchisee Revolt

(Bloomberg) -- Jack in the Box Inc. franchisees are finally getting their way. More than a year after they called for the ouster of Chairman and Chief Executive Officer Lenny Comma, the chain said it’s looking for a new leader.

• The San Diego-based restaurant company hired search firm Spencer Stuart to replace Comma, who’s been in his current role since 2014 and will help with the management transition. Jack in the Box said Wednesday it is looking for candidates both within and outside the company.

Key Insights

• Jack in the Box has faced criticism from its restaurant owners, who last year urged the chain to oust Comma and remake its management team. The 2,200-store chain has been trying to goose customer traffic lately with deals to fend off larger competitors including McDonald’s Corp.
• While at the helm, Comma led the divestiture of Qdoba, and also sold more company-owned stores to franchisees. But restaurant owners have grown dissatisfied with his marketing plans, and the key gauge of same-store sales has stagnated in recent years. Only recently have sales by this measure started to pick up.
• The dining industry is facing a tough environment in the U.S. with staffing and rent costs on the rise, crimping cash for restaurant owners. Jack in the Box recently said labor inflation was hurting them especially in their stronghold of California where minimum wage has been increasing.

What Bloomberg Intelligence Says

“Franchisees have been calling for a change since July 2018 when they reached a no-confidence vote at their annual meeting. We think Cheryl Bachelder would be a solid replacement due to her strong relationship with franchisees and record of sales growth at Popeyes.”

Michael Halen, Bloomberg Intelligence restaurant analyst. Click here for report.

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• The shares are little changed this year, while the S&P 400 consumer discretionary sector jumped 22%.
• Company statement here.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net, Cécile Daurat

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