Jack in the Box Inc. (NASDAQ:JACK) Q4 2019 Earnings Conference Call - Final Transcript
Nov 21, 2019 • 11:30 am ET
percentage of system-wide sales, is expected to come in between 1.7% and 1.9% in 2020.
Guidance for adjusted EBITDA is between $265 million and $275 million, as compared with $269 million for 2019. For 2020, we are expecting higher commodity costs than we experienced in 2019, as well as continued high-single-digit wage inflation. We also do not forecast any benefits from Company-owned life insurance policies or workers' comp adjustments, both of which significantly benefited G&A in 2019.
Guidance for capital expenditures and tenant improvement allowances is approximately $45 million to $55 million on a combined basis. For 2020, we expect 25 to 35 gross new unit openings, all of which are likely to be franchised restaurants. With our relatively low sponsor rates, we expect both gross and net openings to improve versus 2019. To help fuel the acceleration in unit counts that Lenny spoke to, we are currently retooling our incentive plans to further support our franchisees as they make investments in the brand. I'll share more details around this enhanced incentive structure on upcoming calls. We will go ahead and share however that we do not expect to spend more capital in total across capex, tenant improvements in this new incentive that we have previously planned in our long-term guidance, rather you should really think of this as a redirect of dollars previously expected to go towards franchise tenant improvements that will now be used to fuel unit growth.
This concludes our prepared remarks. I'd now like to turn the call over to the operator to open the line for questions. Jennifer?