JACK's strategy is seeking to increase the number of franchise locations. The reason is obvious: Franchisees are equivalent to annuity like cash flows. From fiscal 2006 to fiscal 2011, JACK has grown its consolidated franchise revenues from $110 million to $280 million. EBITDA from those revenues in fiscal 2011 was $170 million -- a margin of over 60%. As the company continues to reduce owned locations in favor of franchised ones, margins increase, which tends to lead to higher valuation multiples. Because JACK currently has all these moving parts, the true valuation picture gets confusing. But that will clear up over the coming years and, as it does, investors could potentially have a total share price above $50 compared with $28 today.