Carol DiRaimo - VP of IR Linda Lang - CEO Paul Schultz - COO Jerry Rebel - EVP and CFO Harold Sachs - Outgoing VP of IR

Chris O'Cull - SunTrust Keith Siegner - Credit Suisse Joseph Buckley - Banc of America Securities Rachael Rothman - Merrill Lynch Jeffrey Omohundro - Wachovia Securities Jake Bartlett - Oppenheimer & Co. Brian Moore - Wedbush Morgan Securities Conrad Lyon - Global Hunter Securities, LLC.

Good day, everyone and welcome to the Jack in the Box third quarter 2008 earnings conference call. Today's call is being broadcast live over the internet. A replay of the call will be available on the Jack in the Box website starting today for those who could not attend live event. (Operator Instructions). At this time for opening remarks and introductions, I would like to turn the call over to Carol DiRaimo, Vice President of Investor Relations and Corporate Communications for Jack in the Box. Please go ahead.

Thank you Wendy and good morning everyone. Joining me on our call today are Chairman and CEO, Linda Lang; our President and Chief Operating Officer, Paul Schultz; and Executive Vice President and CFO, Jerry Rebel. During this morning's session we will review the company's operating results for the third quarter and fiscal 2008 and discuss guidance for the fourth quarter and full fiscal year. Following today's presentation, we will take questions from the financial community. Please be advised that during the course of our presentation and our question-and-answer session today, we will make forward-looking statements that reflect management's expectations for the future which are based on current information. Actual results may differ materially from these expectations based on risks in the business. The Safe Harbor statement in yesterday's news release is considered a part of this conference call. Material risk factors, as well as information relating to company operations are detailed in our most recent 10-K, 10-Q, and other public documents filed with the SEC. And with that I will turn the call over to Linda.

Thank you, Carol. Before I go on, I would like to take this opportunity to welcome Carol to Jack in the Box. I think most of you on this mornings call know that Carol joined Jack in the Box last month as our VP of Investor Relations and Corporate Communications. During her lengthy career in finance and investor relations, Carol has earned an outstanding reputation in her field and is well respected amongst the investment community. We feel very fortunate to have her onboard, and are really looking forward to have her contribution to our organization. Again, Carol welcome.

Thanks, and I am very happy to join Jack in the Box team.

Carol has nearly completed the transition of IR responsibilities from Harold Sachs, who as most of you know, will be retiring at the end of this year. Harold is also here with us this morning as he has been on these calls for many, many years. Harold has been with Jack in the Box for nearly 30 years and has been a tremendous asset in managing our relationships with our analysts, our major investors and financial partners. Harold I would like to thank you for all that you have done over the years for this organization.

Thank you Linda, for your kind comments, I appreciate it.

Sure. While Harold continues to transition his IR responsible to Carol, he will continue in his capacity as Treasurer until the affective date of his retirement. Now taking a look at third quarter results, I would like to offer my perspective on some of the numbers that we reported yesterday. On the strength of new products introduced during the quarter, like our Real Fruit Smoothies, same-store sales at company Jack in the Box restaurants were only slightly negative in the quarter versus the 2% decrease that we forecast in mid-May. Our two year cumulative same-store sales increase of 7% for company Jack in the Box restaurants in the third quarter, improved upon the 6.3% two year cumulative increase those restaurants achieved for the second quarter of 2008. Same-store sales at our company restaurants in California, Phoenix, and Las Vegas combined improved versus the second quarter of 2008. These markets account for approximately 40% of total company restaurants, with California now representing about 31%. Same-store sales outside of these markets combined remained positive, improving on both a one-year and two-year cumulative basis. On the cost side, higher commodity and utility costs continue to negatively impact our business in the third quarter, but we are pleased with how our restaurants are performing in this difficult environment. Our restaurant management teams are doing a great job of running their businesses. As a result, we continue to see improvements in labor management during the quarter. We are also seeing lower turnover at our restaurants, which is resulting in additional cost savings. In addition, profit improvement program initiatives implemented to reduce field and other G&A expenses helped to partially offset the inflationary costs we are seeing. While we believe that price increases will be necessary, we recognize that consumers are coping with higher costs for everything from fuel and utilities to groceries. With that in mind, we will proceed cautiously when it comes to raising prices. To that end, we have engaged a well recognized pricing consultant to develop recommendations for location level prices intended to optimize profits at every restaurant. Our tiered menu strategy from premium products like our Sirloin Burgers to value offering like the recently introduced Nacho Cheese Burger and Nacho Cheese Chicken Sandwich is keeping Jack in the Box relevant to a wide range of consumers, including those whose discretionary spending has been especially hard hit by the country's economic problems. It's important to emphasize that all of our products on our value menu are engineered to provide great value to our guests, without negatively impacting our restaurant margins. We have got a great lineup of new products on our fourth quarter calendar intended to drive traffic to our restaurants, this kind of menu innovation as well as our marketing savvy are at the heart of our strategic initiative to reinvent the Jack in the Box brands. Another key initiative of our strategic plan is to expand our franchising activities, and we continue to make great progress on that front. In 2008, we have accelerated the rate of our refranchising efforts, including 17 company restaurants refranchised in the third quarter, which were all in California. We have sold 30% more locations to date this year than during the same period in 2007. We are now 53% franchised in California, up from the low 40% range two years ago. Our franchisees are helping our organization achieve another major strategic initiative, growing our business. Among the new restaurants opened in the third quarter, were franchise locations in Abilene, San Angelo and Odessa, Texas. As we continue to sell restaurants, we're also and too often entering into new development agreements which will enable our franchisees to fill in existing markets as well as expand our brands into new DMAs. We are making solid gains on a forth- key strategic initiative and our proving our business model. This is a sweeping strategy that goes beyond the ownership mix of our restaurant and involves all aspects of our organization. We are looking hard at the way we do business and are actively pursuing opportunities to improve our processes and procedures. For example, our new product reengineering process significantly shortened the amount of time that we were able to bring our Real Fruit Smoothies to market. And again this has been a great new product launch for us. Continued success in executing each of the major initiatives of our long-term strategic plan is, key to our ability to grow earnings and free cash flow, in order to create a business model that is less capital intensive and not as susceptible to cost fluctuations. Now I will turn the call over to Jerry, for a closer look at the financial side of our business. Jerry?

Thank you, Linda and again good morning. Yesterday afternoon, we reported third quarter earnings of $0.51 per diluted share compared to $0.54 last year, which included a benefit of approximately $0.04 a share due primarily to an insurance recovery. Last year's quarter also included a lower tax rate, which accounted for a difference of approximately $0.03 per diluted share. Linda just reviewed our sales performance for the quarter, so I will jump right into a discussion of restaurant operating margin. Overall, restaurant operating margin decreased 70 basis points versus the prior year to 16.7% of sales, but was consistent with our internal expectations and 20 basis points higher than in the second quarter. Food and packaging costs in the third quarter were 50 basis points higher than last year. For the third quarter, shortening was up 52%, eggs were up 28%, and cheese was up 20%. For some perspective, those three commodities combined account for nearly 12% of our food costs. Beef, which is our largest single-commodity purchase at approximately 20%, was up 1% versus the third quarter of last year. Along with higher food costs, utilities were also up by 40 basis points in the third quarter, primarily due to higher gas and electricity rates. These factors were somewhat mitigated by our continued focus on labor management, which generated a 30 basis point improvement in labor costs versus last year. As part of our re-image incentive program for our franchisees, we paid approximately $1 million in incentives based upon completed re-images, which reduced franchise revenues. As you may recall, we announced earlier this year an incentive payment program of $25,000 per restaurant to our franchisees, assuming certain time and other requirements were satisfied. There were no such payments last year. With respect to SG&A, on both a quarter and a year-to-date basis, the absolute dollars spent were lower than the prior year after adjusting for the insurance recovery in fiscal year 2007. Gains on the sale of 17 company-operated Jack in the Box restaurants to franchisees totaled $15.2 million in the third quarter, compared with $12.3 million in the year-ago quarter from the sale of 22 restaurants. Through the first three quarters of fiscal 2008, cash proceeds on 68 Jack in the Box restaurants sold to franchisees averaged $793,000 per restaurant, and gains averaged $636,000 per restaurant. Future cash proceeds and gains on sale will wary based on the cash flows of the specific restaurants we franchise. Before I review our fourth quarter and full-year guidance, I would like to provide some additional color with regards to the composition of our commodity cost and our outlook. Let's address the outlook first. Overall, we expect commodity costs in the fourth quarter to increase about 5% versus last year, which is consistent with the increase that we saw in both the second and third quarters. The increase in the fourth quarter is expected to be driven by higher cost for beef, which we believe will increase in the high single-digit range for the balance of the calendar year. We are seeing prices stabilized for cheese, dairy and eggs however, which is expected to partially offset the higher beef prices in the quarter. Now, let's take a look at our commodity composition. As I said earlier, beef is our largest single commodity, accounting for 20% of our spend. There are limited opportunities for us to enter into forward contracts on the entire beef complex. However, on the lean trimmings or 90s, we have about 20% of our needs covered through December. With import 90s now priced at a premium to domestic, we are moving most of our needs to the domestic market. Our second largest commodity is chicken, accounting for 12% of our spend. We have fixed-price contracts on chicken that runs through March 2009 for 65% of what we use, and 35% through March of 2010. The next three largest commodities all of which we have contracts for include soft drinks, bakery and potatoes, which account combined for approximately 25% of our spend. Our potatoes contract is the shortest, expiring at the end of our fiscal year. The only other commodities that individually account for more than 5% are currently cheese and produce. With respect to cheese, we have 75% of our needs covered through October and about 40% through December. We have various produce contracts that cover us through fiscal 2009. There was a lot of detail, but I hope the additional color will be helpful for you. Now let's look at our guidance for the fourth quarter. Same-store store sales at Jack in the Box company restaurants are expected to be approximately flat on top of a 5.2% increase in the year-ago quarter. Same-store sales at Qdoba system restaurants are expected to range from flat to a 1% increase on top of a 5.8% increase in the year-ago quarter. Wrapping up, I will only highlight the more noteworthy changes to our full-year guidance since mid-May, rather than reiterate all of the information provided in our news release. For the full year, we are narrowing our EPS guidance to a range of $2.01 to $2.05 per diluted share versus $1.87 per share last year. Our refranchising initiative is now expected to deliver $55 million to $60 million in gains on the sale of approximately 100 Jack in the Box restaurants to franchisees, with $70 million to $75 million in cash proceeds resulting from those sales. As a note, we do expect to file our third quarter 10-Q in the next day or two. Now, I would like to turn the call back over to Linda for closing remarks. Linda?

Thank you, Jerry. Before opening the call to Q&A, I would like to summarize the progress that we are making in executing the four key initiatives of our long-term strategic plan. We are growing our business adding new Jack in the Box and Qdoba restaurants, including locations in new contiguous markets. Restaurant openings in these new markets have been very strong and have exceeded our expectations. Our brand reinvention initiative is keeping our innovative menu relevant to a broader base of consumers, while our restaurant employees are increasing their focus on improving their service and our restaurant re-image program along with our new restaurant prototype are creating a warm and inviting environment for our guests. We are expanding our franchising activities, increasing the ownership state that franchises have in our system as we move towards a goal of being 70% to 80% franchised and we are improving our business model by adopting more efficient processes and practices, maximizing efficiencies in our restaurants and improving the cost structure of our field and administrative facilities. Now we will be happy to take your questions.

(Operator Instructions). Our first question is from Chris O'Cull. You may ask your question and please state your company name. Chris O'Cull - SunTrust: Hi, good morning, everyone, its Chris from SunTrust.

Good morning, Chris.

Hi Chris. Chris O'Cull - SunTrust: Hi. Linda it appears that McDonald's plans to expand a middle tier of its menu. I guess items that are priced around $1.30 to $2. How do you think that will impact Jack's business?

In terms of our product pipeline, I feel really good about the products that we have, and the snack platform that we are rolling out with the Pita Snacks, those are priced at $1.99 and will be very competitive to anything that McDonald's would rollout in that price range. So, I feel confident with our platform of Snack Wrap also with Chris on the breakfast bowls as well. It's really about offering the unique innovative products with high-quality ingredients but really good value for the money, which is what we have in our pipeline going forward. Chris O'Cull - SunTrust: Do you think it may help with the more value-sensitive users, if they do not have as many new options on that dollar menu at McDonald's because of the focus in the middle tier?

Yes, absolutely. I think if they make a move to move off of the dollar double cheese burger that would be helpful. Chris O'Cull - SunTrust: Okay. And then when you look at the prices or the products that you take price increases on. Have you seen much demand sensitivity to those increases?

Generally in our test and we do test price increases. That's really what we are looking at. We offset the price. We ensure that we are getting flow through on the price increases, so the 2.5% is working for us. But as I indicated, that we are engaged with a pricing consultant and will provide more information for you guys later, probably in November, at the November call. Chris O'Cull - SunTrust: Okay. And then two more questions, I know you have started to advertise the refranchising opportunities and I think you have even hired some folks inside that help support that effort. Have you seen much traction from that effort?

Chris, this is Paul. We've actually just recently begun, but yes, we have definitely seen a fair amount of interest in our program. Chris O'Cull - SunTrust: Okay. And then Jerry just a modeling question, you ended the quarter with about $70 million more in debt than you had in the second quarter, yet the interest expense was less. Is that because you are moving down on the pricing grid?

Couple of things Chris, one is the $70 million worth of debt was not throughout the entire quarter. We have seen a lower interest rate for us generally Q2 versus Q3. But the share repurchases, which is really what generated the $70 million worth of debt in the third quarter happened at a fairly slow pace throughout the quarter. So the average debt for the quarter would have been significantly lower than that $70 million. Chris. Chris O'Cull - SunTrust: Okay. Could you give us the share count at the end of the quarter?

Yes. The fully diluted or the actual? Chris O'Cull - SunTrust: I guess either one will work.

Actually if you look at the balance sheet that was in the press release yesterday, the shares are there less the treasury stocks, so you can get exactly to that number. Chris O'Cull - SunTrust: Great. Thanks guys.

Thanks, Chris.

Thank you, our next question system from Keith Siegner, you may ask your question and please state your company name. Keith Siegner - Credit Suisse: Credit Suisse. Just a quick question. I want to follow up on the franchise margins a little bit. I understand the complexities of having the contributions to the franchisees. I understand how that's impacting. But, I was wondering if you could just talk a little bit more about the dynamic, because we had that in place in the second quarter to some extent as well, and this is the first quarter where the franchise margin was actually down year-over-year. Just could you help us understand maybe the pressure from the mix shift between royalties and properties, revenues, maybe how much was related to initial franchise fees? If you could help us understand that dynamic of why that's actually down this quarter, would be very helpful.

The third quarter was the first quarter this year where we have had significant payments to franchisees. We paid on 42 restaurants in the third quarter, only 64 restaurants throughout the entire year. So it doubled the payments that we had in both Q1 and Q2 combined. If you factor-out that $1 million on the revenue line we would have been within 10 basis points or so of where the margin was last year. Now having said that, what's a bit, perhaps more complicated in our franchise margin line, is the fact that we charge franchisees rent for our properties that tends to be at a roughly 3.5% higher rate than what we pay, but that will fluctuate based upon the individual restaurants sold. So you are going to see some fluctuation on that from time-to-time, but its not going to create significant changes. The significant change in the quarter was the payment of the $1 million in the change on the re-image program. Keith Siegner - Credit Suisse: So would it be safe to assume that on a year-over-year basis there was more property revenue contribution to the total franchise revenues than in the prior year?

Yeah, we made no contributions to franchisees for the re-image program last year. This was a program that we just began this year. Keith Siegner - Credit Suisse: No, I mean on the property revenue, since they do carry a slightly lower margin than just royalties?

Okay. Yeah I would say, sure, exactly Keith Siegner - Credit Suisse: Okay. And then one other question, about the franchisees you know we are just talking about getting more interest from the marketing. I know this is a tough environment operationally and from the liquidity perspective, but can you tell us where you stand now on commitment pipeline? What's changed maybe in the last couple of months has anybody new signed up because any updates along that front would be helpful.

Are you referring to the re-franchising pipeline or the development pipeline? Keith Siegner - Credit Suisse: The development pipeline, actually.

The development pipeline continue to be a high for us, compared to the historical levels. So I think what we said back in May, where we had 85 to 90 restaurants with development agreements, and we haven't seen a decline in that. And when we sold restaurants to franchisees they were typically development agreements associated with those. We would expect that to continue to grow over time. Keith Siegner - Credit Suisse: Okay. Thank you.

Thank you. Our next question is from Joe Buckley. You may ask your question and please state your company name. Joseph Buckley - Banc of America Securities: Thank you. I am with Banc Of America. Question on the pricing, you mentioned in your release you are up 2.5% year-to-date. That sounds relatively low and I guess I am curious if you think you are trailing competitors on pricing. And then as you hire this pricing consultant, it sounds like you may go, I think you said location-by-location. What have you done previously? Have you priced sort of regionally or by general market or what potentially could change as a result of that?

Right. Hi, Joe, this is Linda. Yeah I do think that 2.5% is low relative to the competitors, and we have been working with this pricing consultant for a couple of months now. So we should see something in the next few months, early 30, 60, 90 days. So and their approach is a little bit different than our approach. They are taking it down to the restaurant level. We have typically priced by pricing tiers, which generally follow regional or geographic areas. So it is a little bit different approach. It's a little more scientific and we think there is upside there. Joseph Buckley - Banc of America Securities: Okay, and then another question on the pricing. It sounds like you have added or in the process of adding a fair amount of value items, and we have seen with other companies that if you provide a value alternative, you may be able to price a little bit more aggressively on some of the core items. And I guess I am curious if you would agree with that, if you think that makes sense, and if you might go in that direction, as you add more you know sort of value-oriented products to keep the value halo in effect.

I think it will be important for us to look at all of that, Joe, in consideration with our pricing strategy. We'll be looking at all the tiers, all the price points, and we really haven't added a lot of value, products or discount products, it was really just the two nacho products that we added to our value menu as really no news in that area. I would consider the Pita Snacks to be a good value but not necessarily value priced or on our value menu. Joseph Buckley - Banc of America Securities: Okay. I see. Yeah, if the price point is $2, I think it may serve both, you know?

Right. Exactly. Joseph Buckley - Banc of America Securities: Okay. Thank you.

Thanks, Joe.

Thank you. Rachel Rothman, you may ask you question and please state your company name. Rachael Rothman - Merrill Lynch: Hi good morning, it's Rachael Rothman from Merrill. Just had a quick question you guys have done such a terrific job on the re-franchising. Can you kind of highlight for us what made you successful, where we see so many other chains really struggling both on the proceeds per unit and on the number of units.

Hi, Rachel this is Paul. I think our success thus far has been largely predicated on the fact that we have been selling the profounder into low restaurants to existing franchisees, who are in pretty good financial condition and have a lot of interest in expanding the brand.

Rachel when it comes to bringing in outside operators, if you look at the strength of our brand, especially in the new markets, with the new prototype and how well we are doing there, its a very compelling brand. Rachael Rothman - Merrill Lynch: Can you talk a little bit about, are you guys remodeling first and then re-franchising, or are the stores that you are remodeling predominantly stores that will be re-franchised much later or that will remain company owned?

We have actually done both depending upon the deal. Rachael Rothman - Merrill Lynch: Okay. And can you help segment for us your planned 2008 kind of capital expenditures, how it breaks down between the remodel and the new units and maybe Qdoba and Jack in the Box or any other color you can give?

Yeah, Rachael, just let me pull that up here. Okay. If you look at new sites for Jack in the Box, I am going to give you this in approximate numbers, about $29 million for new locations, roughly $125 million for what we would call restaurants facility and brand reinvention. Let me tell you some of the things that are in there. It is the $150,000 per copy of, you know roughly 250 or so company re-images. It includes capital maintenance. It includes our kitchen conversion, and it includes the rollout of our new smoothie platform. Qdoba is going to spend in the $17 million to $18 million range for a whole host of capital expenditures most of which that will be related to new locations. Rachael Rothman - Merrill Lynch: Great. And then one more if I could, I am not sure if I missed this, but if you guys look out, and rethink about modeling the franchised revenue line. Do you guys have a sense for the pace of the franchisee remodels or what the pace of the incentives will be? How we should think about incorporating that in to our franchise royalty line, and then can we fairly assume that that is almost 100% flow through?

Yeah, the $25,000, yeah, the franchisees have the same stated goal that we do, remodel over the next three to four years, 2008 is included in that three to four-year number. I would suggest as I would tend to model that more ratably over the next three years for lack of a better way to do that. We do have a specific schedule that the franchisees will have to follow. It is going to approximate that, though. Rachael Rothman - Merrill Lynch: Excellent. Thank you so much.

Thank Rachael.

Thank you, Jeff Omohundro, you may ask your question and please state your company name. Jeffrey Omohundro - Wachovia Capital Markets: Thanks. Jeff from Wachovia. First question is on the re-franchising; perhaps you can give us an update just on your sense of re-franchising momentum. And also an update on the financing market for re-franchising transactions right now?

Jeff, there is no question that the lending institutions are looking more closely at the deals and often requiring more money into the deal, but it has not been a barrier to date for us to franchise restaurants. We haven't lost a deal yet due to financing, and we continue to have a very good level of interest, particularly from our existing franchisees to purchase restaurants. Jeffrey Omohundro - Wachovia Capital Markets: And with the pace of new product innovations, such as the smoothies, I wonder if you could talk to kitchen productivity and the kitchen-enhancement initiatives, so what the status is on that?

The kitchen-enhancement are essentially completed. There are some smaller units that have not yet been completed, but the vast majority of the kitchen enhancements are done. I will let Paul speak to the efficiencies.

There is no question that the improved equipment and resultant adjacencies have provided for better efficiencies, and clearly enabled us to do more with product lines that would have been much more challenging for us to do had we not done the remodel.

Jeff, the other thing that I'll add is, while it may be difficult to see in today's utility environment, the electricity usage on one particular piece of equipment is showing significant savings with about 8% lower electricity usage in those restaurants. Jeffrey Omohundro - Wachovia Capital Markets: Very good and then finally, at the analysts meeting few months ago, you demoed your kiosk order system. Just curious about what the status of that project might be and how it is working in test?

Yeah Jeff, we are still testing that, still analyzing the kiosk. We are also looking at alternatives to that particular one that you saw at the Analysts' Day. Jeffrey Omohundro - Wachovia Capital Markets: Very good. Thanks.

Thanks.

Thank you. Matthew DiFrisco you may ask your question, and please state your company name. Jake Bartlett -: Yeah, this is Jake Bartlett in for Matt. I am calling from Oppenheimer. I was wondering about the boost you are getting from the remodels? Is there anyway you can quantify the top line boost you are getting from the remodels? Oppenheimer & Co.: Yeah, this is Jake Bartlett in for Matt. I am calling from Oppenheimer. I was wondering about the boost you are getting from the remodels? Is there anyway you can quantify the top line boost you are getting from the remodels?

Yeah, this is Jerry. What we have said in the past, what we have been targeting here is a 20% return on the invested capital of about $150,000. So, you know clearly, you need a little less lift from a high-volume restaurant, and you need a little more lift from a low-volume restaurant because cost-fee model is exactly the same. That's why we really haven't been talking about what our overall targeted lift is. What we can tell you though is, based on our market cash that we were generating sales sufficient to cover that 20% return. Jake Bartlett -: Okay. Is there any requirement that the franchisees do the remodel? Or is it more by choice and with the incentives? Oppenheimer & Co.: Okay. Is there any requirement that the franchisees do the remodel? Or is it more by choice and with the incentives?

They are definitely required to do it. Jake Bartlett -: Okay within the next three or four years I guess? Oppenheimer & Co.: Okay within the next three or four years I guess?

Correct. Jake Bartlett -: Okay. I am also wondering what the lead time to your to the deals are with the re-franchising, just to get an idea as to your visibility. How long does a typical deal take? Oppenheimer & Co.: Okay. I am also wondering what the lead time to your to the deals are with the re-franchising, just to get an idea as to your visibility. How long does a typical deal take?

It varies depending upon the size and complexities of deal, but at a minimum, it would be several weeks to a couple of months, could be much, much longer if it is a more complex deal. Jake Bartlett -: Okay. Also and just trying to get an idea of what the 17 looked like in this quarter? I mean were they to a number of different franchisees or how many franchisees were involved in those transactions? Oppenheimer & Co.: Okay. Also and just trying to get an idea of what the 17 looked like in this quarter? I mean were they to a number of different franchisees or how many franchisees were involved in those transactions?

That was two transactions involving two franchise operators. Jake Bartlett -: Okay. And was there anything driving the focus on the California market, or was that just kind of normal in the quarter? Oppenheimer & Co.: Okay. And was there anything driving the focus on the California market, or was that just kind of normal in the quarter?

We have identified the markets entirely across our system that we believe we want to have company only, as well as those we want to have mixed markets, and we are just continuing to execute along that plan, and I will not get into any more color than that. Jake Bartlett -: Okay. Thanks. Oppenheimer & Co.: Okay. Thanks.

Thank you. Brian Moore, you may ask your question and please state your company name. Brian Moore - Wedbush Morgan Securities: Good morning, Brian Moore with Wedbush Morgan.

Hey, Brian. Brian Moore - Wedbush Morgan Securities: Question on I guess smoothies and same store sales growth, I was just hoping Linda may be you can help us understand the magnitude of that product relative, in terms of sales mix, some of your other recent introductions or maybe speak to, you know, a weighted number of stores during the quarter, or store weeks, because it just seems like the flow through to Q4 should have been a little bit greater in terms of your comp guidance, and I am wondering if there was conservatives built in or something else?

Brian the smoothie launch was absolutely worked for us, and was very well received by the customers. What we found was that and we don't share a specific mix on new product launches, but what I can tell you is that, it was highly incremental to the beverage category. So that's really where we got the lift in our same-store sales, it was from the fact that it was incremental and from a margin standpoint, any trade from any other beverage was a positive margin dollar for us. So, now we are almost through, in fact we are through with the smoothie rollout. We will begin with media support in Phase 2, which is what we call the Eastern division, which really is not the East for those in the East, it is actually Texas, but we call it the Eastern division. And that media support will begin on Monday. Brian Moore - Wedbush Morgan Securities: Okay. That's helpful. Thanks. A question for Jerry. Certainly appreciate all of the color on cogs. To Linda's comments, how should we think about the impact of mix shift on cogs as we look forward to Q4 in terms of the impact of smoothies or other new products will help offset some of the commodity exposure?

Yeah, I think you will clearly get some help there, and we don't provide specific guidance on individual line items for the quarter. What I can tell you and the way that I would think about the guidance is, if you look at our more narrow guidance which really centered around the same midpoint of the wider range that we had in the past, that gives us an implied fourth quarter guidance of $0.47 to $0.51 a share. The consensus out there right now is 46. And really the difference between the 46 consensus and our upper end of that range is the possibility to generate higher gains. I think in terms of the operations, we are generally close collectively to where the consensus was for the quarter. Brian Moore - Wedbush Morgan Securities: Okay. Thank you.

Thanks, Brian.

Thank you. Conrad Lyon, you may ask your question and please state your company name. Conrad Lyon - Global Hunter Securities, LLC.: Yeah, hi thank you. Conrad Lyon with Global Hunter. Questions by for Jerry. Question is re-franchising and SG&A impact. How should we look at that as we go forward as the stores get re-franchised? Is there a number that we should take out on a per-store basis or is it just a slow, if you will, erosion from SG&A over time as the re-franchising takes place?

Yeah, there is a couple of ways to look at that. You can model it on a per-store average basis, and I can tell you in total what that looks like. I'll also tell you it tends to be more of a stair step down, as you franchise enough locations in a particular area, or in a particular market, or in a particular state, you are going to get incrementally higher steps down. Which you want but I will tell you, what, that we have said this before. What we have been averaging over the last several years, when you factor in all of these stair steps it's about $28,000 a restaurant down offset by some increase in the amount of support necessary on these franchise locations. Conrad Lyon - Global Hunter Securities, LLC: Okay. All right.

If that's helpful. But, it is not necessarily linear with each restaurant sold. Conrad Lyon - Global Hunter Securities, LLC: Got you, okay. That's helpful, thanks. One other question and this has to do more so just with trends over the last three months. I mean, especially around Southern California, clearly where we were hit with higher gas prices first before anybody, really accelerated up late May, and then now we are seeing them pulled back quite a bit. I am just curious around the West coast, Southern California kind of how your customer behaved at Jack in the Box, if you saw kind of a move down the menu. Clearly we saw your smoothies do well, but I am just curious if you saw some lower mix combined with some decent traffic here.

Yeah, I think it's too soon to tell. When the gasoline prices started to go up, we saw some traffic behavior with a little bit of a lag. They are down, I think its important to note though, it is down compared to what? They are still above $4 a gallon here. Conrad Lyon - Global Hunter Securities, LLC: Sure.

And I think by most measures that takes a pretty significant chunk out of a lot of consumer pocketbooks. So if that trend continues yeah that will be very good news for us. But, right now it's still above $4 a gallon. Conrad Lyon - Global Hunter Securities, LLC: Okay. Last question. The tomato issue that we had, just want to make sure going forward, was there any one-time impact that we need to weed out going into next year in the third quarter?

No, the reality is that the approximate cost of what we removed and had to destroy was offset by the fact that we were not including tomatoes on the sandwiches until we could get tomatoes back into surplus. So it was effectively an offset. Conrad Lyon - Global Hunter Securities, LLC: Okay. Great. Okay thank you very much.

Yep.

Thank you. (Operator Instructions)

Okay. Thank you very much for joining us today and feel free to give Carol a call with any follow-up question. Thanks a lot.

Thank you. This concludes today's conference. Thank you for participating. You may disconnect at this time.