Thinking Outside the Box

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Thinking Outside the Box

PHOENIX, Ariz. -- Jack in the Box Inc. yesterday announced a strategy to start selling lighter, healthier fare and expand into the southeastern United States, as part of a sweeping strategy aimed at transforming the regional fast-food company into a national chain.

Jack in the Box, which operates 1,850 restaurants located mostly in the West and Southwest, also said it would expand a new restaurant format, which combines a restaurant, convenience store and gas station.

Over the next five years, about one-quarter of its restaurants will be converted into the new format, up from the 12 outlets it now operates, the company said.

In creating non-hamburger menu items, Jack in the Box indicated it wants to tap into the rapid growth of so-called fast-casual chains, such as Cosi and Panera Bread Co., which sell sandwiches and other items that are perceived to be healthier than traditional fast food.

"We have several products in development now. We're looking outside the quick-service restaurant industry and targeting the quality that is available outside it," Linda Lang, an executive vice president at the company, told analysts on a conference call, adding that it is developing sandwiches that are not usually sold in fast-food restaurants.

The San Diego-based company, which ranks fourth among the nation's hamburger chains, also said it would prepare to expand into new markets, including the southeastern United States, over the next five years, Reuters reported.

It also said it would convert about one-quarter of its company-owned restaurants to individual owners, with the goal of having 35 percent of its system run by franchisees in the next five years. About 20 percent of its restaurants are now run by franchisees.

Jack in the Box also said it was interested in acquiring other restaurants as a defensive measure against competition in the fast-food industry. Other chains, including McDonald's Corp. and Wendy's International, have also recently acquired non-hamburger chains in a bid to diversify.