Introduction to the Sale
Jack in the Box is saying adíos to Del Taco. The San Diego-headquartered restaurant giant announced Thursday it is selling its entire Del Taco chain to Yadav Enterprises, one of Jack in the Box’s franchisees, for $115 million in cash.
Jack in the Box management said the deal will bolster its bottom line by retiring debt and move the company “to a simpler, asset-light business model” as part of its “Jack on Track” plan that it rolled out to investors in April, aimed at improving long-term financial performance.
Reasons Behind the Sale
“This divestiture is an important step in returning to simplicity, and we look forward to focusing on our core Jack in the Box brand,” company CEO Lance Tucker said in a news release announcing the sale. The transaction is expected to be completed by January. Founded in 1964, Del Taco is the second-largest Mexican American quick-service food chain in the U.S., with more than 550 restaurants in 18 states.
The Buyer: Yadav Enterprises
Yadav Enterprises operates more than 310 franchise restaurants, including Jack in the Box, Denny’s and TGI Friday’s. The Fremont-based company also owns the Tex-Mex casual Taco Cabana chain in 150 locations and Nick the Greek restaurants in 90 locations. The founder and CEO of Yadav Enterprises, Anil Yadav, started in the restaurant business as a 17-year-old fry cook at Jack in the Box, according to USA Today.
Financial Implications
The sale comes three years after Jack in the Box bought Del Taco for $575 million. “Jack in the Box made a very, very bad decision to buy Del Taco in 2022,” said John Gordon, head of the San Diego-based restaurant industry research firm Pacific Management Consulting Group. “We all kind of said at time, wow, that’s a lot of money they’re paying for Del Taco.” Quick-service restaurants have faced recent financial headwinds, Gordon said, including increases in minimum-wage laws across California — $20 per hour for fast-food workers — plus an overall slowdown in the restaurant industry that contributed to Jack in the Box’s decision to sell its Del Taco holdings.
Impact on the Market
Traded on the NASDAQ, Jack in the Box stock took a hit Thursday, closing the trading day at $17.61 per share, down 8.66% from the previous day. That said, Gordon believes the sale announced by Tucker, who was promoted from Jack in the Box chief financial officer to CEO on March 31, is a prudent one. “They have to work their way through this high debt,” he said, “and I have no doubt at this point that the new CEO, who’s financially grounded in the first place, has a good plan to do so.” One of the nation’s largest hamburger chains, Jack in the Box has about 2,160 restaurants across 22 states.
Future of Del Taco
As for what the deal means for Del Taco customers, Gordon thinks Yadav Enterprises may close some restaurants that are financially underperforming — especially those outside of Southern California. “I predict the next wave of ownership will thin down some of the existing Del Taco markets, where they perceive or can prove to themselves that there are too many stores,” Gordon said. Earlier this year, Del Taco closed all of its restaurants in Colorado except one but months later reopened 17 stores in the Rocky Mountain State.
Conclusion
The sale of Del Taco by Jack in the Box to Yadav Enterprises marks a significant shift in the restaurant industry, particularly in the quick-service sector. With the deal expected to be completed by January, the focus will be on how Yadav Enterprises navigates the challenges faced by Del Taco, including potential closures of underperforming restaurants. The move is seen as a strategic decision by Jack in the Box to simplify its business model and reduce debt, but it comes at a considerable loss, given the initial purchase price of Del Taco.
FAQs
- Q: Who is buying Del Taco from Jack in the Box?
A: Yadav Enterprises, a franchisee of Jack in the Box, is buying Del Taco for $115 million in cash. - Q: Why is Jack in the Box selling Del Taco?
A: The sale is part of Jack in the Box’s plan to simplify its business model, reduce debt, and focus on its core brand. - Q: How many restaurants does Del Taco have?
A: Del Taco has more than 550 restaurants in 18 states. - Q: What is the expected outcome for Del Taco customers?
A: There might be closures of underperforming Del Taco restaurants, especially outside of Southern California, under the new ownership. - Q: When is the transaction expected to be completed?
A: The transaction is expected to be completed by January.
Originally Published: October 16, 2025 at 2:44 PM PDT
