Another Fast Food Giant Is Closing Hundreds of Stores Amid Struggles
Jack in the Box, one of America’s most recognizable fast food chains, is preparing for a major contraction as it moves to close hundreds of underperforming restaurants across the country. The decision comes as the 75-year-old brand faces declining sales, rising costs, and mounting debt.
The closures make Jack in the Box the latest major player to scale back aggressively, joining a growing list of restaurant brands trimming their footprints to survive shifting consumer behavior and economic pressure.
Jack in the Box Confirms Up to 200 Closures
Image via Wikimedia Commons/Billy Hathorn
Jack in the Box has announced plans to shut down approximately 150 to 200 locations as part of a broader turnaround strategy known internally as “Jack on Track.” The company confirmed that between 80 and 120 restaurants will close before December 31, 2025, with the remaining underperforming locations set to shut down as franchise agreements expire.
Most of the affected restaurants have been operating for more than 30 years. Company leadership has framed the closures as a necessary step to stabilize the business and refocus on more profitable markets.
Declining Sales And Rising Costs Drive The Decision
The closures follow a difficult financial year for the chain. Jack in the Box reported a 7.4% decline in same-store sales, which indicates that customer traffic and overall demand have decreased. Revenue declined by approximately 6.6% year over year, while restaurant-level margins decreased due to continued pressure from higher labor and commodity costs, which also impacted profitability.
Inflation has played a key role in pushing food and staffing expenses higher, while many lower-income customers have reduced their discretionary spending, including fast food. Industry surveys indicate that more than 40 percent of lower-income Americans are visiting quick-service restaurants less frequently, a trend that has particularly affected mid-tier chains.
Heavy Debt Adds Pressure
@nationsrestaurantnews Jack in the Box has entered into a definitive agreement to sell Del Taco Holdings to Yadav Enterprises Inc. for $115 million in cash. The deal, which is subject to certain adjustments, is expected to close by January. Jack in the Box acquired Del Taco in March 2022 for approximately $585 million in an all-cash deal. The company first announced its intent to sell Del Taco, which operates more than 550 restaurants, in April. In a statement, CEO Lance Tucker said the divestiture is an important step in returning to simplicity: “We look forward to focusing on our core Jack in the Box brand … We are confident we have entered into a transaction with the right steward for Del Taco in its next chapter of evolution. We wish Del Taco success as they enter this next chapter.” Head over to NRN.com to read more. #jackinthebox #deltaco #foodnews #foodies #nrn ♬ News, news, seriousness, tension(1077866) – Lyrebirds music
Jack in the Box is also grappling with significant leverage. The company ended the year with approximately $1.7 billion in total debt, prompting management to prioritize cash conservation and debt reduction. Analysts have noted that the debt load leaves little room for error as the chain works through its recovery plan.
To support that effort, the company recently sold its Del Taco brand for $115 million, a sharp loss compared to the more than $575 million it paid to acquire the chain just a few years earlier. Executives have described the sale as a move toward simplicity.
Chief Executive Officer, Lance Tucker, has been candid about the company’s performance, telling investors that the results in 2025 fell short of expectations. He emphasized that rebuilding operational discipline and improving execution will be central to restoring growth and shareholder value in 2026 and beyond.
Under the turnaround plan, Jack in the Box also expects a modest, ongoing level of store closures in future years, with annual shutdowns projected at around 1 percent of systemwide locations starting in 2026.
Part Of A Wider Fast Food Pullback
Jack in the Box’s retrenchment is not happening in isolation. Other major restaurant chains have announced significant closures in 2025, including Denny’s, Red Lobster, TGI Friday’s, Applebee’s, and Noodles & Company.
Rising costs, softer consumer demand, and intense competition on value have combined to create one of the most challenging periods the fast food industry has faced in years. While higher-income consumers continue to spend at premium brands, mid-market chains without a deeply loyal customer base are struggling to maintain traffic and margins.
Jack in the Box hopes that closing underperforming locations will lead to a more financially stable operation capable of returning to net unit growth. Management has pointed to opportunities in newer markets and restaurant remodels as potential drivers of future performance.