Tim Mullany: Yeah. Inflation has been a meaningful impact not only for us, but for the industry at large. For Jack in the Box in 2023 we are facing roughly a $20 million impact after price and comp reduction, it’s call it, $7 million to $10 million of impact. Del Taco will be roughly double that. So that has been meaningful with the initiatives that Darin mentioned earlier, as well as the pricing that’s offsetting that we have been able to mitigate that somewhat and we are seeing FY 2023 as an opportunity for some of that inflation at least level off if not decelerate.
Nick Setyan: Okay. And just last question, can you tell us what the company-owned unit growth will be in FY 2023 between the two brands?
Tim Mullany: We are looking for — we are guiding 30
Darin Harris: Company-owned.
Tim Mullany: Yeah. Oh! Company-owned. We don’t separate our company-owned versus franchise in our guidance.
Nick Setyan: Okay. Thank you.
Tim Mullany: Yeah.
Operator: Your next question is from the line of David Tarantino with Baird. Your line is open.
David Tarantino: Hi. Good afternoon or good morning. I wanted to ask, I think, it got asked earlier, but around franchisee level cash flows. I was wondering if you had an update on what the cash flow per unit kind of run rate is today. I think you have given that number in the past.
Tim Mullany: Yeah. We are not providing that at this stage. We know that the industry is challenged at this point. In normalized environments we have proven to be a top tier driver in ROI. It is the number one important metric for our business. We are focused on that. We are working with our franchisees to improve their margins. One of the biggest things here and it’s getting operating hours in place. On the company side, as an example, we have been a leader operationally in doing that. We are one hour off of pre-COVID operating levels. So really closing that gap and that’s been a meaningful driver in our restaurant-level margin performance. Franchisees are roughly two hours off of that right now. So we are working to get that component of the system in line with the company’s performance and that will meaningfully improve franchise level cash margin.
David Tarantino: Got it. And then one quick follow-up. On the Del Taco refranchising, is there a certain long run target you have for that system in particular or maybe the broader Jack in the Box portfolio. I guess what’s your target there in terms of what percentage of franchise you want that to be?
Darin Harris: Yeah, David, we haven’t set a guide for that target. Internally, we are managing to what we think is appropriate from a time standpoint to make sure that this is accretive as possible. As we think about using the proceeds, whether it’s debt pay down or share repurchases and spurring on growth. So we are going to do that in a thoughtful and meaningful way and we will pace and sequence accordingly. And it also allows us to do it in a way that similar to what Jack in Box in the past where it was over time and select the right operators who will grow.
David Tarantino: Understood. Thank you very much.
Darin Harris: That said, as we have said over and all, long-term we want to be asset light.
Operator: And your final question comes from the line of Jared Garber with Goldman Sachs. Your line is open.
