Jack in the Box Inc. is expanding a franchise seed program that it says helps increase brand awareness and drive unit growth in new markets, while furthering the company’s goal of becoming a dominantly franchised chain.
The program works by opening company-operated restaurants in new markets, which are destined to be sold as packages to experienced franchisees.
The San Diego-based operator and franchisor of quick-service restaurants opened its fourth seed-program market Monday, with the debut of a new company-owned Jack in the Box unit in Indianapolis, according to Grant Kreutzer, director of franchise licensing and recruitment. Two more restaurants are slated to open there this spring, he said.
“Some brands out there may have a market available and you can franchise them, but we want to be there and launch a new market with all of those benefits,” Kreutzer said. “When the company goes in and launches — say an Oklahoma City or Kansas City — we’re controlling how the brand is first being positioned in the market. We can use the high profile locations and have the resources and capital to move quickly to secure the best sites and launch the brand in the right way.”
The scheduled late spring groundbreaking for a company restaurant in Cincinnati will make that the fifth such seed market under the program begun in the spring of 2010.
The company created the seeding strategy in response to its decision about five years ago to move the Jack in the Box system from primarily company-operated restaurants to mostly franchised units. The program helps drive collaboration with franchisees to pioneer new markets that are contiguous to established trading areas, Kreutzer said.
Jack in the Box unveiled the first such company seed restaurant in Tulsa, Okla., about 21 months ago, and since then has opened three more in that market. Kreutzer said the company also has developed five restaurants in Oklahoma City, with two more to open their doors next month, and four restaurants in the market spanning Kansas City, Mo., and Kansas City, Kan.