Jack in the Box Turnaround BA 493 By: Randy Springer and Jessica Poole

Background Opened in 1951 in San Diego by Robert O. Peterson Bought and sold over time by various parent companies Currently owned by Foodmaker Co.

Background Acquired Qdoba Mexican Foods in 2003 Over 2,100 locations in 17 states – Mostly Western states, although venturing towards east coast Now sells burgers, breakfast food, Mexican food, egg rolls – Local delicacies: biscuits and sweet tea (SE U.S.) and Portuguese sausage, eggs, and rice platter (Hawaii)

The Big E. coli Scare Jan./Feb. 1993: 3 children in Washington killed by E. coli bacteria – 450+ people ill after eating or exposure – Stomach cramps, diarrhea, kidney failure Traced to undercooked hamburger

The Big E. coli Scare All meat recalled Jan traced to Von’s Meats out of California Lawsuits followed – Foodmaker sued Vons for contaminated meat – Vons countersued for defamation and trade libel – said meat wasn’t cooked to minimal temperature – Jack in the Box sued for lost business

The Big E. coli Scare Fingerpointing by all parties Foodmaker settlements ranged from $19,000 to $15.6 million Losses felt by companies: – Jack in the Box: $45.5 million net loss for the quarter ending July 4, 2003 – Foodmaker: $63.8 million for nine month period of 2003, stock dropped 30%

Time For a Change Jack was introduced in 1970’s, but discontinued due to complaints of violence violence Was reintroduced in 1995 as CEO and mascot to help improve company imagereintroduced Successful campaign, featuring new commercials, antenna balls (more than 4 million distributed) and Jack’s own MySpace pagenew commercials MySpace

Company Growth After E. coli scare in 1993, stocks dipped Revamping of marketing in 1995 brought growth to the company Still ranked among nation’s top fast food chains

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