Mark King is back in the restaurant business with Jack in the Box

Few restaurant chains in the U.S. have struggled as much as Jack in the Box has over the past year.

Same-store sales have declined at least 4.4% in each of the past five quarters, including 6.7% declines in each of the past two. The company just fended off an activist investor in Sardar Biglari. And it is now run by an interim CEO.

You couldn’t tell by talking with franchisees. At the recent National Jack in the Box Franchisee Association conference in Maui, operators regularly expressed confidence in the brand’s current management, and notably that interim CEO, Mark King.

New leadership

“I felt a lot of that,” King said in an interview. “More importantly, I heard a lot of that directly from every franchisee I bumped into, even the ones who are struggling.”

For King, the interim position represents a return to the restaurant industry after a three-year hiatus. The longtime executive with TaylorMade and Adidas spent more than four years as CEO of Taco Bell, long enough to earn the Restaurant Business Restaurant Leader of the Year.

King was brought in to serve on the Jack in the Box board last year and this year was named chairman. In May, King was thrust into the interim CEO role when the Jack in the Box board opted to fire former CEO Lance Turner.

King said that he was initially approached to take a seat on the Jack in the Box board shortly after he retired at Taco Bell, but he said he didn’t take it, largely out of respect for his old employer. “I had so many friends at Yum Brands and Taco Bell and among the franchisees,” he said. “It just seems wrong to me.”

He was asked again last year, and decided that enough time had passed to take a board seat. King said he loved working in the restaurant industry and with franchisees.

“I’m a golfer,” he said. “I worked in golf. Then I was at Adidas. And then I go to selling tacos and quesadillas and chalupas. It was my favorite stop. And then I fell in love with franchisees. Here you have an entrepreneur that invests in a brand with their own capital to build a business and family wealth and all the things that franchisees do. It was a great experience.”

He was also familiar with Jack in the Box, in part as a resident of Southern California, but also because former CEO Lenny Comma was a former neighbor. And it helps that it’s not a big commute.

“To be on a public board 15 miles from my house, so it has all that going for it,” King said.

As for the decision to change CEOs, he said, “we had to do something more radical.” Yet he said he initially resisted taking the interim CEO position. King had settled into a consulting gig and was serving on boards and wasn’t necessarily ready for a job like that.

But, he said, “It’s a big challenge,” and “I love a challenge.”

Company potential

He also saw potential. “It has great potential and opportunity,” King said. “I like the enthusiasm of the group of people here. They’ve lived through challenging times and they still have hope, love, and passion for the brand.”

King did suggest the company’s financial condition has improved. Tucker was hired in part to help the company pay down its debt. The company has done that to a degree, paying down about $200 million of the $1.7 billion in long-term debt the chain had when he was hired.

Since he was hired, King has spent a lot of time talking with franchisees and working in restaurants. “I barely sit at my desk,” he said. “I hadn’t turned on my laptop in so long I didn’t think it would work.”

He went on an already-scheduled roadshow, visiting franchisees in three different cities, where he met 110 different operators, including 60 in his first week on the job. He also worked in a restaurant.

“I made the greatest taco of all time,” King said. “But I was supposed to do it in 20 seconds. It took me 82.”

He also has had “Muffins with Mark” sessions over the past five weeks to meet with operators and employees and ask about the chain’s challenges and what needs fixing. King estimates that he’s met with some 300 people.

All of that has helped him understand more what is affecting franchisees and what the company needs to do.

King suggested Jack in the Box could trim the menu, which he called “a little overwhelming.” But he also said that the chain’s unique menu, which includes such non-burger items as a Teriyaki Bowl, egg rolls and, of course, those tacos, gives the chain an opportunity to innovate.

“We have lots of opportunity to innovate on the menu and reduce it at the same time,” he said.

Franchisee profitability

King said the top priority is to ensure franchisee profitability. “If the franchisees are making money, we make money as a franchisor,” he said. “As their sales go up, we get our 5% royalty, we make our money. We exist for the sole purpose of helping franchisees be successful.

“I don’t preach that. I live that.”

As for how long he plans to be on the job, that remains to be seen. King is overseeing a number of initiatives at the brand that he wants to see through. He plans to be in the position “at least until the end of next year.” If and when the company does hire a replacement, King wants an extended transition period.

And regardless, he’ll still be on the board. “I don’t want to come and go,” King said. Franchisees “deserve some stability. I’m in no hurry to leave.”