Jack in the Box is trying to stop one of its largest franchisees from shutting down 38 restaurants in Washington, even as the company continues a broader effort to close struggling stores across the country.
According to industry publication Restaurant Business, the San Diego-based fast-food chain filed for a restraining order in Washington state court after franchise operator AJP Enterprises threatened to begin closing its remaining restaurants on April 22.
Court filings indicate that Jack in the Box terminated AJP’s franchise agreements last month after the operator allegedly failed to pay $1.4 million in required marketing fees. The company says the stores cannot legally close while the dispute is still being fought in court.
The fight centers on Steve Wazny, who owns both AJP Enterprises and sister company NHG Enterprises. Wazny’s companies had already been locked in a yearslong battle with Jack in the Box after the franchisee closed eight underperforming restaurants in 2024.
Wazny later sued the chain, arguing that Jack in the Box improperly tried to terminate the rest of his stores in order to force a sale at what he called a “distressed valuation.”
The two sides eventually reached an agreement allowing the remaining locations to stay open, but that arrangement collapsed after Jack in the Box said AJP stopped paying marketing fees.
Now, Jack in the Box argues that the franchisee is using the threat of closure as leverage. In its filing, the company said AJP is attempting “to force JIB to abandon its attempt to require AJP to pay its marketing fees.”
The chain also said AJP has “no contractual right” to close the restaurants on its own. If the stores go dark, nearly 40 Jack in the Box locations in the Seattle area could disappear almost overnight.
As this battle continues, Jack in the Box is simultaneously encouraging other franchisees to close weaker stores as part of its larger turnaround strategy. CEO Lance Tucker said earlier this year that the company is “focusing on franchisee economics by closing underperforming restaurants.” Franchisees closed 12 locations during the last quarter alone, while the chain posted a net loss of 55 restaurants in the last calendar year.
That strategy dates back to 2025, when Jack in the Box unveiled its “JACK on Track” program. According to RetailWire, the company announced plans to shut down between 150 and 200 underperforming restaurants, many of which are more than 30 years old, while also exploring the sale of its sister chain, Del Taco. At the same time, Jack in the Box was still trying to grow in new markets, including a planned return to the Chicago area after nearly four decades away.
