Amid Franchisor ‘Uncertainty,’ Qdoba Franchisees Organize
By forming an independent franchisee association, Qdoba Mexican Eats operators aim to “protect and enhance their $250 million collective investment” in the brand. This comes as parent company Jack in the Box Inc., concerned that operating two different brands is negatively impacting the company’s value, continues to evaluate potentially selling the Qdoba brand.
In its announcement June 30, the Qdoba Franchisee Association said it will focus on mutually beneficial solutions to support the brand, with primary goals of advocacy with the franchisor; facilitating education and best practice sharing amongst the franchisee community; and providing access to group insurance plans and other back-office solutions for its members.
On a call with franchisees before the announcement, Ron Stokes, chairman of the association, said the QFA wants to “provide franchisee leadership and have a voice in continuing to grow the Qdoba brand in all aspects of the business, whether it be in marketing, operations, technology or development.”
“With the uncertainty surrounding the future ownership of the Qdoba brand, we felt this was the appropriate time to unite the franchisee community with an independent voice to protect the $250 million collective investment franchisees have made in the Qdoba brand,” said Stokes in a statement. “The franchisee community feels positive regarding recent leadership changes and additions at the brand level and hopes to see that leadership team allowed to continue to make positive strides in advancing the top-line momentum we are seeing and key brand initiatives.”
Stokes is president and COO of Roaring Fork Restaurant Group, which operates more than 50 Qdoba units in Wisconsin, Illinois and Iowa. Other members of the five-person board of directors are Vice Chairman Michael Scott, Secretary/Treasurer Stan Kramer, Randy Key and Will Charbonnet Jr.
Jack in the Box brought in Morgan Stanley & Co. LLC in May to help it evaluate its options with respect to Qdoba. Qdoba’s same-store sales fell 3.2 percent in the company’s fiscal second quarter, a drop that followed a 1.4 percent decline in the first quarter.
“At our investor meeting last May, we said one of the factors that would cause us to reconsider our strategy with respect to Qdoba was valuation,” Jack in the Box CEO Lenny Comma said in the company’s quarterly earnings release May 16. “It has become more apparent since then that the overall valuation of the company is being impacted by having two different business models.”
Qdoba franchisees own and operate 340 of the system’s 717 total restaurants in the United States and Canada. The franchisee association hired attorney W. Michael Garner of Garner & Ginsburg P.A. to serve as its legal counsel and association management firm Elevanta LLC to manage its daily operations.