American restaurant company Jack in the Box has reached a definitive agreement to sell its wholly owned subsidiary Del Taco Holdings to Yadav Enterprises for $115m in cash.

Del Taco Holdings operates and franchises more than 550 outlets.

The deal will complete by January 2026.

Jack in the Box plans to use the net cash proceeds, after taxes and transaction costs, to pay down debt within its securitisation structure.

The sale follows a strategic review initiated in April 2025, and aligns with the company’s Jack on Track plan announced the same month.

Jack in the Box acquired Del Taco for $575m in 2022, aiming to leverage the Mexican food chain’s strong drive-through presence.

However, a slowdown in demand has resulted in challenging quarters for Jack in the Box, with stiff competition and value wars in the fast-food industry affecting its performance.

The divestiture is part of the company’s plans to simplify the business and move to a more asset-light model.

Jack in the Box CEO Lance Tucker stated: “This divestiture is an important step in returning to simplicity, and we look forward to focusing on our core Jack in the Box brand.

“After a robust process, we are confident we have entered into a transaction with the right steward for Del Taco in its next chapter of evolution. We wish Del Taco success as they enter this next chapter.”

BofA Securities acted as Jack in the Box’s exclusive financial adviser, while Sullivan & Cromwell provided legal counsel.

Yadav Enterprises’ representation was led by general counsel Steven M Kries, with advisory support provided by Baker Tilly.

Jack in the Box intends to provide fiscal 2026 guidance and updates to other aspects of the Jack on Track plan alongside its earnings release on 19 November 2025.