Margin Outlook
Q: What's the outlook for margins considering challenges like AB1228?
A: Margins are pressured due to AB1228, which increased labor costs by over 4 percentage points " ,. " Despite this, improvements in inventory management have enhanced food and packaging costs by almost 2 points. " Driving top-line growth is essential, and new menu rollouts are showing substantial improvements both in top-line and bottom-line " ,. "

2025 Guidance and Pricing
Q: Any thoughts on pricing into fiscal 2025?
A: For Jack, pricing is expected to be around 3% to 4%, with a 2% rollover and an additional 1% to 2% during the year " ,. " For Del Taco, pricing is expected to be 5% to 6%, with a 3% rollover and an additional 2% to 3% during the year, aligned with the new menu rollout. "

Franchisee Profitability
Q: How is franchisee profitability today and outlook for 2025?
A: Franchisee profitability is basically flat year-over-year " , and the overall health of the system is good " ,. " However, AB1228 may impact P&L somewhat in 2025, with an estimated $15 million impact on company restaurants. " Driving top-line growth is crucial for profitability. "

Development Pipeline
Q: Has the tough macro environment impacted franchisee appetite to build?
A: Franchisee appetite remains strong, with 101 development agreements for 464 restaurants. " There are 18 restaurants under construction and 54 in design and permitting. " New markets like Salt Lake City show promising Average Unit Volumes (AUVs) of $90,000. "

CapEx Guidance
Q: Can you break down CapEx guidance for next year?
A: Technology investments are around $40 to $45 million for digital and restaurant technology, including POS rollout to be completed by end of 2025. " New restaurant openings account for $30 to $40 million, targeting markets like Chicago and Florida. " The rest covers maintenance and reimages. "

Refranchising Del Taco
Q: Any updates on Del Taco refranchising milestones?
A: Del Taco is about 80% refranchised, achieving asset-light status. " Deals are in works for 13 restaurants. " Refranchising continues but is being evaluated considering AB1228's impact to maintain margins. "

Digital Initiatives
Q: How are digital efforts improving execution in 2025?
A: Focus is on enhancing guest experience through frictionless digital and back-to-basics programs " ,. " Investments in the digital stack and restaurant-level experiences aim to improve accuracy and reduce alerts. " Digital sales are currently at 14% to 16%, with loyalty user growth up 107%. "

Value Strategy
Q: How did value mix trend this quarter, and are changes needed?
A: The "Munchies Under $4" value menu improved trends by 120 basis points in Q4. " It also increased add-on purchases. Focus remains on growing value offerings amid competitive dynamics. "

Competitor Impact
Q: Did competitor issues benefit Jack's sales?
A: Improvements were already seen before competitors' challenges. " While some share gain may have occurred, it wasn't the primary driver of better trends into the first quarter. "

California Performance
Q: Was softer performance due to California demand or share loss?
A: California performed relatively well, in line or slightly better than Q4 " ,. " Price strategy held up well. Industry-wide, QSR transactions are softer but expected to improve in 2025. "

Sales Acceleration
Q: What's driving the quarter-to-date sales acceleration?
A: Same-store sales are up approximately 1% at Jack, driven by innovation, value alignment, and leaning into digital. " The rollout of the new app, including Android version, contributes to meaningful sales growth. "

Closures Impact
Q: Do you expect closures to subside and improve net openings?
A: Closures were accelerated in Q4 but the system's health is good. " Going forward, closures are expected to align with industry norms of 16 to 18 per year or 1%. "

Capital Allocation
Q: What drives the share repurchase assumption for next year?
A: Priority is investing operating cash flow into strategic initiatives, with CapEx investments being priority one, followed by dividends " ,. " Share repurchases are modeled based on comfortable free cash flow levels. "

Traffic and Mix Metrics
Q: How did traffic and mix perform in Q4, and expectations for 2025?
A: Traffic was down about 5%, with slight improvement from Q3. " Mix improved slightly, and price was lower than the previous quarter. " For 2025, expect a combination of traffic and mix changes in line with pricing expectations. "