Here are the next risks that could most seriously hamper the development prospects on this stock:
*JACK's core markets - California, Texas, and Arizona - are typical facing severe economic downturns that will likely inhibit sales growth for the immediate future as consumer sentiment and spending declines during these uncertain times, and consumers deleverage over these geographic markets because of real asset deflation, job losses and uncertainty, demographic shifts (specially in Arizona), along with other negative macro trends.
*A newly released NetWorld Alliance report forecasts severe challenges in finishing refranchising inside the QSR industry as weak credit markets and tight bank lending has curtailed financing of these kinds of projects. This would likely hamper the power of JACK to implement their refranchising strategy, which negatively impacts the company's cost structure, margins and profitability.
*Success in the QSR sector is reliant on a variety of factors that JACK carries a competitive disadvantage in presently, including: (1) absence of international expansion and growth, along with foregoing of your first-mover advantage in high growth markets; (2) expansion plans from the saturated US markets, where growth opportunities tend to be more limited and level of competition is very keen; (3) insufficient economies of scale or possibly a significantly strong balance sheet by which to advertise effectively or absorb razor-thin margins due to discounting, promotions, and other competitive actions as long as other peer companies, for instance McDonald's Corporation (MCD), will be competent at withstanding.
*JACK has aimed at a re-branding strategy to attemp