3 Reasons to Diversify Your Investment Portfolio with Jack in the Box

Have you ever considered diversifying your investment portfolio with Jack in the Box Franchises?

At Jack in the Box, we’ve worked with a variety of investors, hospitality groups, private equity, and capital management groups to add balance and protection to their asset mix.

In this article, we’ll go over three reasons you should diversify your investment portfolio with Jack in the Box.

1) Reduced Market Volatility

Stocks and bonds are popular options for most investors. However, they can be associated with a high level of market volatility.

Although most businesses are tied to the overall economic climate, franchising typically has a reduced level of correlation to public markets.

For example, the value and income from your franchise locations more than likely won’t drop substantially because of a bad day for the stock market.

When you incorporate franchises like Jack in the Box into your portfolio, you’re protecting a percentage of your assets from daily market fluctuations.

2) Hedge Against Inflation

For decades, inflation has caused the buying power of cash to deteriorate while the cost of goods continually rises.

At Jack in the Box, our franchisees have a reliable way to ride out periods of inflation and sometimes improve the performance of their business.

Inflation due to increased demand for goods and services allows quick service restaurants (QSRs) to respond by simply increasing prices across the menu.

In an article written by Kiplinger, they provide further insight into how franchises like Jack in the Box offer investors much needed insulation against inflation:

“As the costs of goods and services rise, business owners can increase prices accordingly. Because franchises serve essential industries, you will continue to see customers come through the door despite inflation. In some cases, revenue for these businesses may increase during times of increased inflation.”

3) Opportunity During Uncertainty

One of the main reasons an investor will balance and diversify their portfolio is to protect against long-term instability in the economy.

This is often done by investing in businesses and assets that are able to make adjustments and perform well during times of economic downturns.

During the Covid-19 pandemic, Jack in the Box was able to gain new customers. You can learn how in this article written by Forbes from October 2021:

“While chains paused their marketing and trimmed their menus to keep up with a sharp shift to off-premise operations and a massive labor shortage, Jack in the Box added even more options.

Extensive variety – from tacos to egg rolls – is what the chain is known for after all, and a global pandemic wasn’t about to change that…

The intentional decision to expend its innovation pipeline has worked out well for the chain throughout unprecedented times.

Jack in the Box’s same-store sales have increased by double digits on a two-year basis and are doing so in part due to increased traffic, whereas most of its competitors are simply raising prices or promoting higher-end products.”

The menu at Jack in the Box is filled with budget-friendly items like our burgers, two tacos, and curly fries. Plus, we’re open 24/7 and serve breakfast, lunch, and dinner all day and night.

How to Diversify Your Portfolio with Jack in the Box

Franchises are a popular asset class for investors focused on building a well-diversified portfolio. They’re able to offer steady, predictable returns without the volatility you’ll find in other markets.

The financial requirements for applying to start a Jack in the Box Franchise are straightforward:

• Minimum Liquidity: $500,000
• Minimum Net Worth: $1.5MM
• Franchise Fee: $50k per Location

We also require franchisees to have five years of restaurant experience. However, if you don’t meet this requirement, you can partner with an operator who does.

The estimated initial investment for a Jack in the Box Franchise is $1,697,000 - $2,694,600 excluding land, financing, and certain other costs.

You can find an in-depth breakdown of this number in Item 7 of our Franchise Disclosure Document.

Check Out These Additional Resources

Diversifying your portfolio with Jack in the Box can help you create a well-balanced mix of investments for yourself or your clients.

At Jack in the Box, we work with our franchisees every step of the way to get their restaurants up and running.

Here are some additional online resources you may like to check out:

• Jack in the Box Available Markets
• 5 Benefits of Multi-Unit Franchising with Jack in the Box
• How Much Does a Jack in the Box Franchise Cost?

If you have any questions, please contact our franchise sales and support team.