One Of The First Major Fast Food Chains Is Struggling To Stay Afloat: Here's Why

When people need to tighten their spending, they usually cut back on indulgence items before cutting back on necessities — and that includes unnecessary takeout and dine-in trips, causing some restaurant chains to struggle financially. In a world where people are slimming down their spending, Jack in the Box, the 75-year-old fast-food chain that serves up the usual menu items from burgers to crispy chicken sandwiches, has announced the closure of as many as 200 stores.

The biggest reason for the closures is due to American households spending less on fast food. They're either skipping out on trips entirely or purchasing smaller, less costly meals as they feel the weight of a difficult economy take its toll. For example, lower-income consumers are not buying the usual add-ons like drinks, or are buying a single entree instead of a combo. When consumers shrink their budgets, fast-food chains without a dedicated following, such as Jack in the Box, feel it more.

In its recent fiscal quarter, Jack in the Box announced that it saw a decline of around 7.4% in same-store sales, and an overall decline of 6.6% for the year. The lower numbers have led to restructuring, with the chain announcing it will close between 150 and 200 stores. By the end of 2025 alone, the chain will close 80 to 120 stores, with others to follow based on varying agreed-upon termination dates with franchisees.

Food and grocery prices have continued to rise over the last few years, as has the general cost of living. While "low income" can vary depending on a person's location, it's defined federally as a person who makes less than $15,650 per year. Fast food has even gotten expensive, and between 2019 and 2024, it has priced out those lower-income Americans. An average McDonald's menu item has seen a 40% price increase during that five-year period, according to the chain. Inflation, higher labor costs, and tariffs have all played roles in the price increases, but single and household incomes have not seen 40% raises.

In 2025, Jack in the Box launched a "Jack on Track" program to help boost its revenue once it follows through with the agreed-upon number of closures. In addition to closures, the program also includes reallocating dividends, selling certain buildings, and substantially reducing its spending on new restaurant development over the next year.