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Jack in the Box (NASDAQ: JACK) operates and franchises Jack in the Box and Qdoba Mexican Grill restaurants in twenty-one (21) U.S. states. The company's 2,888 stores are concentrated in California, where it was founded, Texas, and the Southwest. For fiscal year ending September 2014, the company reported revenue of $1.48 billion and Operating Income of $162.3 million. Its mix of hamburger and Mexican style food diversifies its revenue stream and reduces risk, while recent expense margin improvements increased net income 76% year over year (although revenue is flat).

Like most franchised real estate, cap rates for net leased Jack in the Box and Qdoba locations vary based on whether the guarantor is a corporate entity or a franchisee. A new corporate guaranteed location, which can come with a primary term as high as twenty (20) years, will trade in the low 4% range in California and the high 4% to 5% range outside of California. Cap rates for franchisee guaranteed locations depend on the financial strength of the operator, but are approximately 6.5% outside California. Certain operators, such as Anil Yadav, who controls nearly 10% of all Jack in the Box locations via franchising, can command lower cap rates in a sale leaseback format depending on how the ownership entity is structured.