Talk about a value deal.
A multi-unit franchise operator from Northern California, Yadav Enterprises Inc., bought Lake Forest-based Del Taco from Jack in the Box for $115 million.
The San Diego-based burger chain offloaded the Mexican fast-food brand, known for cheap tacos and burritos, after acquiring the brand in 2022 for approximately $585 million.
Yadav is a Fremont-based operator of more than 310 franchise restaurants, including Jack in the Box, TGI Fridays, Taco Cabana and Nick the Greek.
The transaction, which includes roughly 550 Del Tacos, is expected to close in January.
“This is a bad thing for Jack in the Box,” John Gordon of Pacific Management Consulting Group told the Business Journal of the chain’s losing investment.
ÂJack in the Box announced plans in April to divest the Del Taco business to strengthen its balance sheet and return to “a simpler, asset-light business model.”
“This divestiture is an important step in returning to simplicity, and we look forward to focusing on our core Jack in the Box brand,” Jack in the Box CEO Lance Tucker said in a statement. “After a robust process, we are confident we have entered into a transaction with the right steward for Del Taco in its next chapter of evolution.”
Del Taco generated systemwide sales of $959 million for the 12 months ended June 2025, down 2% from a year ago, according to Business Journal data. The taco chain’s same-store sales, a key metric that signals a brand’s financial health, declined by 2.6% in the fiscal third quarter ended July 6.
The sale is part of the operator’s “JACK on Track” turnaround plan to recover revenue. This included the closure of approximately 80 to 120 of its own underperforming stores.
Shares of Jack in the Box (Nasdaq: JACK) fell 8.7% to $17.61 per share in the trading session after the announcement; it had a market cap of $334 million at press time. The company also reported a 7.1% decrease in third-quarter same-store sales.
Before and After the Sale
Upon the initial buy in 2022, Jack in the Box said that acquiring the taco chain would help position both brands “as stronger QSR (quick service restaurant) players with greater scale and the ability to enhance the guest experience while pursuing profitable growth.”
“Together, Jack in the Box and Del Taco will benefit from a stronger financial model, gaining greater scale to invest in digital and technology capabilities, and unit growth for both brands,” previous CEO Darin Harris said at the time.
Harris resigned two years later, and current executive Tucker was named to the top role in March 2025 after filling the interim role for a month.
Since March 2022, shares have dropped by about 81%. Jack in the Box reported revenue of $1.69 billion for fiscal 2023, then dropped to $1.57 billion in 2024.
Analysts are expecting a 6.8% decrease to $1.46 billion in 2025.
Jack in the Box’s original plan for Del Taco was to refranchise or convert company-owned stores into franchises. At the time of the purchase, Del Taco had about 600 restaurants.
According to the Southern California-based restaurant analyst Gordon, the plan was conceived by the former management team, likely to help improve Jack’s balance sheet, and because “security analysts tend to favor franchised brands.”
In November 2022, the San Diego parent started selling company-owned Del Taco restaurants to existing franchise partners, as well as new franchisees. At the time, roughly half of Del Taco’s total restaurant count was company-owned.
By late 2024, nearly 80% of Del Taco locations were franchised. However, Gordon noted that existing Jack franchisees were not buying as many Del Taco restaurants as the company needed.
A few months later, Jack in the Box began seeking alternatives for the Lake Forest chain.
Gordon attributed the “JACK on Track” improvement efforts to Tucker, who first joined the brand as chief financial officer in 2024. When it came to recovery, it was easy to see that Del Taco was not a positive cash flow for the company.
The restaurant analyst said CEO Tucker is “right on mark,” given the circumstances of the decision to divest.
Del Taco’s future is “to be determined” as of now, Gordon added.
“We wish Del Taco success as they enter this next chapter,” Tucker said.
