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— Happily, it returned to thinking small. It said it would concentrate on improving its products and services. To that end, it is readying an Innovation Center just north of its headquarters at Ruffin and Balboa. Everything is secret now. "We see a great opportunity to reinvent not only Jack in the Box, but fast food," enthuses Luscomb. That's hyperbole -- and a little bit like Nixon's secret plan to end the Vietnam War -- but actually, Jack is probably better equipped to pull it off than its competitors, including the much larger ones.

Jack intends to eschew chewing up competitors -- that is, it says it will avoid price wars. Don't count on that. "How can you avoid competing on price?" harrumphs Allen.

Whether it wants to or not, Jack will remain a regional chain. It has big shares of the California, Arizona, and Texas markets. It would be folly to invade new regions, diversify into the also-sated sit-down restaurant business, or buy another doggy chain. "They will have to wait it out until the price competition abates," says Allen. Jack is stuck in a lousy business, but it probably has the savvy to gobble up market shares from competitors.

Jack's financial history should be studied by another San Diego restaurant chain, Garden Fresh, which owns a string of generally successful soup-and-salad restaurants. On the last day of last month, Garden Fresh was purchased by investors who took it private. No doubt it will be brought public again, à la Jack twice, and more recently Petco. When Garden Fresh goes public again, check that balance sheet for junk debt before you nibble on the stock.

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