Jack In The Box Makes A Del Scorcho Deal To Buy Del Taco

Like chocolate and peanut butter, two southern California fast food brands chose that they taste better together. Jack in the Box announced Monday that it had bought Del Taco for a cool (ranch?) $ 575 million, reports the Los Angeles times.

What’s next? Popeye’s Fried Chicken opens its first UK location? Oh wait a minute That happened too.

On the corporate and business side, the deal enables the combined companies “to increase profit margins through increased bulk buying power and achieve cost savings of $ 15 million over the next two years,” writes the LA Times. In short, this new, bigger fast food borg should be able to cut their grocery bills through better deals. Economies of scale and so on.

Meanwhile, anecdotal reports have said that cannabis enthusiasts everywhere are enjoying the option of nightly runs to combine Jack in the Box / Del Taco Drive-Thrus. Why, yes, we’d like an extra Del Scorcho wrapper for those curly fries.

The move comes when Jack in the Box emerges from some tough years in which franchisees cast a vote of no confidence in former CEO Leonard Comma. Since its spring 2020 acquisition, current CEO Darrin Harris has struggled to patch the boundaries with franchise owners and has been pursuing an aggressive growth strategy for the brand.

JACK IN THE BOX DEL TACO

Tacos will be on display on a table at a Del Taco restaurant in Fairfield, California on December 6, 2021.

(Justin Sullivan / Getty Images)

The first “Casa Del Taco” was opened in 1964 by Ed Hackbarth and David Jameson in Yermo, a small town in the Mojave Desert of San Bernardino County. The restaurant was a hit and started expanding across Southern California. In 1973 the company shortened its name to Del Taco. Three years later, Hackbarth and Jameson sold their shares in the booming chain to a group of investors.

Del Taco now has approximately 600 locations in 15 states. About half of these are franchise businesses, while the rest are owned and operated by the company. Most of the Del Taco restaurants are in California. The rest is spread across the western United States. The company is headquartered in Lake Forest, Orange County.

JACK IN THE BOX DEL TACO

A jack-in-the-box restaurant in San Rafael, California on December 6, 2021.

(Justin Sullivan / Getty Images)

Jack in the Box emerged from the drive-in chain Topsy’s, which Robert O. Peterson founded in San Diego in 1941. Topsy’s circus-oriented decor with drawings of a clown. In 1951 he converted Topsy’s on El Cajon Boulevard into a Jack in the Box. It was the first major chain to focus on the two-way intercom system and drive through. In 1968, Peterson sold the company to Ralston Purina and the chain boomed in the 1970s.

Jack in the Box now has more than 2,200 locations in 21 states, mostly on the west coast. Almost all of them, 93%, are owned by franchisees. It is still headquartered in San Diego.

Jack in the Box is paying $ 12.51 per share in cash for Del Taco, a 66% premium over the fast food chain’s closing price on Friday, the company reports LA Times. The transaction is expected to close early next year, but has to be approved by Del Taco shareholders. If it goes through, the company will have quick service restaurants in 25 states.

What questions do you have about eating out in LA?

Elina Shatkin connects hungry Angelenos – through food – with the culture, history, people and neighborhoods that make up our city.

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