Jack in the Box is looking to its new boss to sharpen its direction and hasten store closures. (Photo via Smith Collection/Gado/Getty Images)
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F&B operator Jack in the Box has announced the executive it hopes can reignite one of America’s best-known brands. But veteran Taco Bell executive Taylor Montgomery has to prove he can drive a turnaround for the San Diego-based hamburger chain when he becomes President, effective September 14.
A newly created role will put him in charge of brand strategy and sales growth and is expected to become CEO within the next 12 months, succeeding interim CEO and executive chairman Mark King, himself the former CEO of Taco Bell Corp., who replaced Lance Tucker in May.
Montgomery himself spent more than a decade at Taco Bell, most recently as global chief brand officer, overseeing the growth strategy for more than 9,000 restaurants. Before that, he held roles including chief marketing officer at the Yum Brands group that includes Burger King and spent more than six years at Procter & Gamble.
Jack in the Box’s third quarter results showed mixed results. Management pointed to simplified operations and more precision marketing as key drivers — including the early launch of the Philly Cheesesteak platform — while King emphasized the need to improve same-store sales and franchisee profitability. But other promotions missed their mark.
So, here are the five priorities for Montgomery if he’s to arrest market challenges at Jack in the Box.
1. Give the brand a reason to matter again
Montgomery’s biggest immediate challenge will be translating brand familiarity into a compelling reason for consumers to visit more often.
At Taco Bell he helped build a distinctive personality around innovation, cultural relevance, value and limited-time products. Jack in the Box has some of the same ingredients — an irreverent brand voice, a broad menu and a willingness to experiment — but needs to turn them into a more coherent proposition.
Montgomery said he wants to “bring more guests to Jack in the Box,” but that will require more products, promotions and restaurant experiences that give consumers a reason to choose it in an increasingly crowded burger and chicken segment.
2. Fix franchisee deals
Perhaps the most important part of Montgomery’s brief is improving franchisee profitability. For a franchised restaurant business, corporate strategy only works if operators can make money executing it.
That means Montgomery will need to look closely at food and labor costs, pricing, restaurant-level productivity, technology and the investment required to keep restaurants competitive.
Jack in the Box has to create a system in which franchisees see a clear financial incentive to invest in the brand, remodel restaurants and open new locations.
3. Make the restaurants better
The burger business has become brutally competitive and speed, accuracy, cleanliness, food quality and consistency are key to lure customers back to its stores.
Montgomery will need to ensure Jack in the Box’s restaurants deliver the brand promise at the point where consumers experience it and that could also mean accelerating modernization and making better use of digital ordering, loyalty and other technologies that can increase frequency and improve labor efficiency.
Planned store closures have proven slower than anticipated because of lease and franchise contract exits and to date only around 40 of the up to 200 closures promised have been achieved as part of its Jack on Track program.
CJack In The Box is looking for a turnaround across channels and franchisees. (Photo illustration by Cheng Xin/Getty Images)
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4. Get the growth formula right
Jack in the Box operates approximately 2,115 restaurants across 25 states, Mexico and Guam. The question is not simply how many more restaurants it can open, but where and under what economics.
The company sold Del Taco Holdings to Yadav Enterprises for approximately $119 million late last year, simplifying its portfolio and leaving Jack in the Box with a clearer opportunity to concentrate its resources on its eponymous chain. Montgomery needs to establish where the brand can win, which markets offer the strongest returns and what a successful new restaurant should look like.
5. Rebuild confidence with franchisees and investors
Ultimately, Montgomery will be judged on sales, profitability and shareholder returns. But before those numbers improve, he will need to rebuild confidence among the franchisees responsible for operating most of the system.
His appointment is designed to provide continuity while also signaling a change in direction. King will remain as chair after the transition, giving Montgomery access to a veteran of the Taco Bell system as he takes over.
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