San Diego-based Jack in the Box Inc. franchisees want chief executive officer, Leonard “Lenny” Comma, and the current leadership team out following a vote of “no confidence” that took place during its annual meeting in July.
According to a news release dated Oct. 9, the National Jack in the Box Franchisee Association, which is comprised of 95 franchisees representing approximately 2,000 restaurants out of about 2,240, is asking the board of directors to replace the current leadership team, including Comma. The move is a result of a “culmination of years of long-ranging discussions and unanswered concerns brought directly to Jack in the Box CEO Lenny Comma,” Michael Norwich, NFA board chairman, said in a statement.
“We have reached out in every possible manner to communicate our concerns to the leadership and the current board of directors by offering meetings, conducting our own surveys of the franchise system and proposing various solutions to the issues facing our system.”
The list of concerns in the letter includes:
• The restructuring of upper management and the appointment of a qualified CEO;
• The appointment of a dedicated chief marketing officer with a clear strategic vision and plan of execution for the company;
• The cessation of questionable financial tactics like reducing support staff and infrastructure so as to avoid further reduction of already depleted G&A expenses and resources;
• Serious concerns about the use, allocation and management of the marketing fund;
• The enforcement of the association’s and franchisees’ rights arising out of a prior settlement agreement entered into in 1999.
“We are in need of leadership that is going to provide a robust strategy and vision to allow for the long-term, viable success of this major brand,” David Beshay, NFA board member, said via the news release. “We can no longer sit idly by while the existing management team destroys the value of this brand for the franchisees, for employees and for shareholders. The right thing to do is to approach the board of directors directly as to our concerns and demand action, and that’s what we are doing.”
When asked for a statement, Jack in the Box said:
“For the past several years, and during the past year in particular, we’ve worked closely with the leadership of the NFA on a variety of issues of importance to the company and our franchisees. We have always been open to their constructive feedback and have worked to address any legitimate concerns. Importantly, we believe the viewpoints expressed today by the NFA leadership are not reflective of the entire franchise community.
“The company will continue to work with the franchise community to develop and refine our strategy for success, and ensure our ultimate goals are fully aligned. We remain focused on balancing the interests of all our stakeholders, including our franchisees, customers, employees, and shareholders.”
The National Jack in the Box Franchisee Association has hired franchisee attorney Robert Zarco, founding partner at the Miami litigation firm of Zarco, Einhorn, Salkowsi and Brito.
“Throughout my involvement, the Franchisee Association has acted diligently and in good faith, making every imaginable effort to reach out to respectfully express their concerns directly with the Jack in the Box leadership to no avail,” said Zarco. “It’s unfortunate that the Jack in the Box leadership has allowed the tension to reach this point.”
Comma has been CEO of Jack in the Box since January 2014 and was previously the company’s chief operating officer.