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Qdoba Mexican Grill to close 67 locations

Local Valencia location to close for good today

Posted: June 28, 2013 1:55 a.m.
Updated: June 28, 2013 1:55 a.m.

Jack in the Box Inc. announced it will be closing 67 Qdoba Mexican Grill locations, including its location in Valencia, pictured above. The local store will shut its doors for good at 3 p.m. today.

 

 

Qdoba Mexican Grill is closing its Santa Clarita restaurant Friday at 3 p.m.

Parent company Jack in the Box Inc. announced plans to close 67 of the company-operated locations by September — about 10 percent of the chain’s restaurants.

Ten of those locations are in Southern California, said Brian Luscomb, spokesperson for the chain.

The Denver-based chain has restaurants located in Valencia, Westlake Village, Moreno Valley, Redlands, Alhambra, Ontario, Thousand Oaks, West Covina, Simi Valley and Temecula, he said.

Only five restaurants in the region will remain open, Luscomb said.

Employees were first notified of the closing on Tuesday, said Jose Mendez, manager. Qdoba workers are being offered severance packages, he said.

Short notice is pretty typical in the industry, Luscomb said. Some restaurants have even been known to shut down without telling employees — who learn about the closure when they show up for work, he said.

Giving short notice in the industry is based on preserving customer service while the restaurant is open and for employee retention purposes.

Upon learning a restaurant is about to be shuttered, employees might leave or look for another job immediately, making it difficult for a restaurant to remain operational, Luscomb said.

While employees are being offered positions at other locations if possible, the Valencia restaurant doesn’t have another Qdoba close by so that option may not be entirely practical for the displaced workers, he said.

Jack in the Box is, however, giving severance packages to everyone who works through the closure and packages to certain levels of employees who work through the transition period in shutting the restaurant down after the doors are locked for the last time, Lauscomb confirmed.

Analysts suggest the closures benefit Chipotle Mexican Grill restaurants — but the latter’s stock prices have dropped since the announcement was made.

Poor real estate locations are also blamed by analysts for the demise of the 67 restaurants.

But, Qdoba is by no means leaving the market. It’s expanding.

It is only shutting down restaurants at under-performing locations and intends to open 70 to 75 new restaurants at higher-quality sites within the next year, Lauscomb said.

In the following year, the company is planning to open another 60 to 70 locations, he said.

“It’s possible to look at the Valencia market again.”

The company announced it estimates it will take a $40 million hit in pre-tax charges as a result of the closures, said Linda Lang, chair and chief executive of Jack in the Box.

The 67 locations that are closing generated about 13 percent of the company-unit sales during the first half of 2013, the company reported.

As of close of trading Thursday, Jack in the Box shares have risen $2.32 since the announcement that it would close the Qdoba locations on June 17.

Chipotle shares have dropped $3.74 since the closures were announced.

jana@signalscv.com

661-287-5599

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