Jack in the Box sells Qdoba for $305 million

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Brian Lutz
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Jack in the Box sells Qdoba for $305 million

Post by Brian Lutz »

http://abcnews.go.com/Business/wireStor ... n-51880717

After recent problems at Qdoba, Jack in the Box is selling the chain to Apollo Global Management (a private equity firm) for $305 million. As far as I can tell, Apollo Global has no existing restaurant holdings in their portfolio.

I happen to think that Qdoba still has a pretty good product overall (I certainly have preferred them over Chipotle even before Chipotle's food poisoning scare of a couple of years ago) but their branding seems confused as of late. A lot of their collateral seems overly busy and confusing. Of course, a lot of what's ailing them lately (general decline in the business, higher wages) is affecting everyone else too, so we'll see what new owners can do with the chain.
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Re: Jack in the Box sells Qdoba for $305 million

Post by pseudo3d »

Jack in the Box isn't building an empire with alternate brands, and the chain doesn't strike me as a particularly troublesome one that needs to divest alternate businesses like Qdoba. Unlike, say, Burger King, the company is stable in that it has remained independent for years. It seems to have been bought originally in the early 2000s when the company was doing other alternate experiments (JBX Grill, Quick Stuff convenience store/gas stations) that all have since ended.
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Re: Jack in the Box sells Qdoba for $305 million

Post by storewanderer »

It is also interesting as many franchisees of Qdoba, are also franchisees of Jack in the Box.

I think the Qdoba product is generally a poor value and always came off as a "me too" imitation of Chipotle. Of course, Chipotle today is not the same Chipotle of 5 years ago. Conversely, in the past few years, there have been some changes to the Qdoba menu that make it not quite come off like a "me too" of Chipotle.

I predicted demise of Qdoba when Chipotle entered my market. Despite two Chipotles opening in close proximity of two Qdobas, the Qdobas are still there, still have steady business, and have not resorted to any discounting that I can see. So they seem to have a following. They are obviously doing something right.
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Re: Jack in the Box sells Qdoba for $305 million

Post by pseudo3d »

storewanderer wrote: December 20th, 2017, 8:41 pm It is also interesting as many franchisees of Qdoba, are also franchisees of Jack in the Box.

I think the Qdoba product is generally a poor value and always came off as a "me too" imitation of Chipotle. Of course, Chipotle today is not the same Chipotle of 5 years ago. Conversely, in the past few years, there have been some changes to the Qdoba menu that make it not quite come off like a "me too" of Chipotle.

I predicted demise of Qdoba when Chipotle entered my market. Despite two Chipotles opening in close proximity of two Qdobas, the Qdobas are still there, still have steady business, and have not resorted to any discounting that I can see. So they seem to have a following. They are obviously doing something right.
The only thing that comes close to Chipotle in my market is Freebirds World Burrito, which was a burrito place out of SoCal (Isla Vista) but started growing out of College Station, and has more locations (2:1, though Chipotle tends to be more popular). I've gotten the impression that Chipotle is preferred overall--at one time, Freebirds had large burrito sizes that were fairly cheap for the amount of food in there, but in the end Freebirds sold out to investors, and as time went on Freebirds became about as expensive as Chipotle but noticeably lower quality in terms of ingredients.
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Re: Jack in the Box sells Qdoba for $305 million

Post by Brian Lutz »

For a while this space was getting rather crowded, at least around here. Any Chipotle I see around here is just as crowded as ever during the lunch rush (in fact, a lot of the time the long lines are one of the reasons I avoid the place) but Qdoba still holds their own pretty well. Taco Del Mar was around long before either of the two around here (they got their start in Seattle) and has had its ups and downs, but has largely remained steady in their home area, alhough I can't speak much of any other regions. Baja Fresh made a big push into this area in the early 2000s but most lasted only a few years and they are now down to one WA location in Kent (although they still have quite a few in the Portland metro area.) In the last year or so Cafe Rio has begun opening locations in Washington, although they only have three so far.
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Re: Jack in the Box sells Qdoba for $305 million

Post by storewanderer »

This space is very crowded. In the area I am most familiar with in Reno in a 1/2 mile or so radius, there is Qdoba, Baja Fresh, Costa Vida (literal carbon copy but not as good as Cafe Rio), and Chipotle. In addition to Del Taco, Taco Bell, and a Whole Foods with a mexican bowl/burrito bar.

Chipotle has been very tainted in this area ever since the e-coli thing. Business is probably off 50% or more from what it was.

Del Taco and Taco Bell have been around a while and have their customer. Of the others, Baja Fresh has been there the longest and has remained pretty stable at lunchtime with good crowds, but isn't doing much at dinner anymore. The Baja Fresh facility is pretty run down and not maintained very well. Qdoba has fairly steady business at both lunch and dinner but I never see it at capacity; it is generally clean and well run there, and maintained. Chipotle opened and had lines out the door until the e-coli thing, now the place is really slow. Lunch has a small line but most times of day there are only 3-4 customers there and the Chipotle is never as busy as their immediate neighbors Five Guys and Chickfila. Before the e-coli, it was the opposite with Chipotle being MUCH busier than Five Guys. Costa Vida is very crowded during lunch, grossly inefficient, and also has a decent customer flow at dinner (again this place is grossly inefficient; if they moved their line at a Chipotle rapid speed they would not look very busy).
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