Activist investors looking to squeeze some change out of Jamba Juice have won two seats on the restaurant chain’s board — appointments that give two of the company’s large investors a greater say on how the company is run.
Jamba (JMBA) on Tuesday said that Engaged Capital, which owns about 8.2% of the company, and JCP Investment Management, which has a 2.3% stake, were each given a board seat with the agreement that they will vote in favor of the election of the company’s slate of directors for an upcoming annual meeting. A date for that meeting has not yet been set.
“Jamba is focused on driving shareholder value as we expand our juicing platform and transition to an asset-light, franchise-focused model,” said CEO James White. “We believe that including representatives from two of Jamba’s largest investors is in the best interest of the company and all shareholders.”
JCP managing member James Pappas, and Glenn Welling, chief investment officer at Engaged Capital, were each appointed to Jamba’s board effective immediately. They will also be up for election at the company’s annual shareholders meeting.
“We appreciate Jamba’s constructive approach and the recent steps that have been taken to enhance shareholder value,” said Welling.
Jamba has been under pressure from activists to cut expenses and find more franchisees for its stores, according to Bloomberg. Revenue from franchises has risen from $6 million at the end of 2009 to $16.4 million for 2013. Franchise revenue climbed 8.5% to $14.8 million for the first nine months of 2014 from the prior year period. The model also appears more profitable, with Jamba reporting slim profits over the past few years after years of losses. Jamba has said it expects 80% of stores in the system to be franchise locations by the end of this year.
As of the end of September, the company had 862 Jamba Juice locations globally, including 535 franchisee-owned and operated stores in the U.S., and 55 franchise locations abroad. The company has said it wants to add about 500 more stores to the U.S. market over the next five years.