One of America's Largest Burger Chains Just Bought This Major Mexican Brand
America's fourth-largest burger chain is joining forces with a popular taco chain in an effort to form a bigger and more powerful fast-food entity.
Jack In the Box, which once upon a time owned Qdoba, has announced that it will be purchasing another Mexican fast-casual: Del Taco. The $575 million dollar deal is expected to be completed sometime in the first quarter of 2022. The move will make the Jack-Del Taco empire span some 2,800 locations across 25 states, according to QSR Magazine. It will also make both brands more competitive in their respective categories: Jack In the Box going up against McDonald's, Wendy's, and Burger King, and Del Taco against the likes of Taco Bell and Chipotle.
"This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities," Darin Harris, CEO of Jack in the Box, said in a statement. "Together, Jack in the Box and Del Taco will benefit from a stronger financial model, gaining greater scale to invest in digital and technology capabilities, and unit growth for both brands."
Jack In the Box believes the deal will help it accelerate its off-premise sales, as 99% of Del Taco's locations feature a drive-thru. The company also said that the acquisition will immediately result in $15 million in annual savings thanks to the merging of overhead costs and operational areas like technology, digital, and supply chain.
Del Taco has been on an upward trajectory in recent years. "We have uniquely positioned Del Taco as a leader in the growing Mexican [chain restaurant] category, expanded our digital capabilities to enhance consumer convenience and focused on growing the brand through franchising, resulting in eight consecutive years of franchise same-store sales growth and an accelerating new unit pipeline," said the chain's CEO John Cappasola. "We are excited to have found a partner in Jack in the Box that shares our vision for the future and has the expertise to further accelerate Del Taco's growth."
In the long run, customers can expect to see Del Taco expand at a more rapid pace, the leaders of the two chains said. And who knows, we may even see some co-branded locations down the line.
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