Jack in the Box Inc. closed the sale of its Del Taco Holdings subsidiary to Yadav Enterprises for a total consideration of $119 million, consisting of $109 million in cash and a $10 million, 21‑day promissory note that carries an 8% annual interest rate and is fully guaranteed by Yadav’s founder, Anil Yadav. The transaction, completed on December 22, 2025, is the centerpiece of Jack in the Box’s “Jack on Track” turnaround plan, which seeks to eliminate the debt‑heavy Del Taco brand and concentrate capital on the core Jack in the Box restaurants.
The $119 million price represents a significant write‑down from the $585 million purchase price paid in March 2022, underscoring the extent of Del Taco’s decline. The proceeds will be applied almost entirely to the company’s $1.7 billion debt load, reducing the net debt/EBITDA ratio from roughly 6× to a more sustainable level. The sale also removes a brand that has been a source of goodwill impairment—$203 million in 2025—thereby improving Jack in the Box’s balance sheet and freeing management to focus on operational improvements.
Del Taco’s performance has deteriorated in recent quarters, with same‑store sales falling 3.9% in Q4 2025 and restaurant‑level margins slipping from 9.3% to 6.8%. Rising labor costs in California, driven by minimum‑wage increases, and margin compression from higher food and supply‑chain expenses have eroded profitability. These headwinds, coupled with a complex dual‑brand structure, made Del Taco a drag on the company’s overall performance and a target for divestiture.
In Q4 2025, Jack in the Box reported diluted earnings per share of $0.30, a 73% decline from $1.12 in Q4 2024, and total revenue of $326.2 million, down 7% from $349.3 million a year earlier. The revenue drop was driven by weaker performance at both brands, while the earnings decline was largely due to the $203 million goodwill impairment and higher operating costs. Despite the earnings miss, revenue beat the consensus estimate of $321.5 million, reflecting modest resilience in core menu categories.
CEO Lance Tucker emphasized that the sale is a “meaningful step toward simplifying the business and reducing debt.” He noted that while the company remains disappointed with 2025 operating results, the divestiture positions Jack in the Box to accelerate margin recovery and invest in digital ordering and franchisee support. Management has maintained its 2026 guidance, projecting a modest revenue growth of 2–3% and a net debt/EBITDA ratio target of 4–5×, signaling confidence that the turnaround plan will generate sustainable cash flow.
Following the announcement, market participants reacted positively, with analysts upgrading their outlook for Jack in the Box. The sale was cited as a catalyst for debt reduction and a clearer focus on the core brand, which analysts believe will improve operating leverage and margin potential. The transaction also removed a brand that had been a source of goodwill impairment, thereby improving the company’s financial statements and reducing future impairment risk.
The divestiture marks a strategic pivot for Jack in the Box, moving from a multi‑brand model to an asset‑light, franchise‑focused operation. By shedding Del Taco, the company can reallocate capital to high‑margin franchisee support, digital innovation, and selective store remodels, all of which are expected to lift same‑store sales and profitability. The sale also signals to investors that management is committed to a disciplined balance‑sheet strategy, which could enhance long‑term shareholder value.
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