Jack in the Box loses count…

January 5, 2011

Some might remember the huge dust-up that happened back during the 2008 election when John McCain wasn’t sure about the number of houses that he owned with his wife, Cindy. Given the economy and the rising number of foreclosures, it wasn’t too surprising that the Obama campaign turned McCain’s comments into this TV ad.

We were reminded of this as we skimmed this amended 10-K that Jack in the Box (JACK) filed yesterday to correct the 10-K that they filed just before Thanksgiving. While the total number of restaurants was the same in both filings at 2,731, both the number of restaurant buildings owned on leased land and the number of leased restaurants on leased land were dramatically different: 312 instead of 500 for the former and 731 instead of 543 for the latter.

Now we certainly don’t expect Wendy’s (WEN) or Burger King or one of the other fast-food outlets that Jack in the Box competes with to make a commercial exploiting the mistake (though that would be pretty funny). After all, it was probably just a typo on the part of one of the many people involved in culling information for the 10-K.

Still, it does seem just a little bit odd that a basic number like this wasn’t correct the first time around. After all, when you look at the 10-K that the company filed last year, there’s a noticeable difference in the numbers that should have set off at least a few alarms.

One other thing that becomes clear after studying the charts in the two filings: while the company only added 9 new restaurants between Oct. 2009 and Oct. 2010, there was a pretty dramatic shift between the number of restaurants owned in favor of those that were franchised, which also could help explain the apparent confusion when it comes to the various ownership structures.

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Posted in: D&O Turnover, Disclosures

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Companies Mentioned: Jack In The Box Inc.,
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