Source: San Diego Business Journal
As Mexican food trends up and grows hotter (figuratively if not literally), QDOBA is at the front of the line.
The Mission Valley-headquartered home of America’s No. 2 Mexican fast-casual restaurant brand is continuing its climb to the top of the fast-food chain, showing robust growth over the last few years with more expansion to come.
The privately owned company reports 14 straight quarters of positive same-store sales as well 22 new franchise signings nationwide as it closes in on 800 locations in the United States and Canada.
“The brand is a fascinating brand – it’s vibrant,” said QDOBA CEO John Cywinski. “QDOBA is what I affectionately refer to as ‘the best-kept secret in the restaurant industry.’ And I say that because while we are clear No. 2 to Chipotle, we’re much smaller. We have soon-to-be-800 restaurants in 46 states, and that often surprises people.
“We are far and away in the fastest growing segment of the restaurant industry in Mexican fast casual. And we’re very proud of our brand.”
As part of its growth strategy, QDOBA has made significant corporate investments in remodels and upgrades to existing company locations.
The company has invested nearly $30 million this year in restaurant-level capacity and technology upgrades, also making transformative remodeling efforts across 80 company restaurants.
In 2020, QDOBA announced a focused franchise initiative targeting key U.S. markets and building out regions across the country, including Arizona, Southern California, Florida, and Texas, and has been working toward that goal.
Cywinski said QDOBA currently is in 46 states, with its largest presence in the Midwest, including 85 locations in Colorado, 65 in Michigan, 60 in Wisconsin and 40-something in both Missouri and Ohio. It has much room to grow, he said, especially in Florida and Texas — and in Southern California.
Los Angeles has one QDOBA, on the campus of Loyola Marymount University. There are just a handful of other SoCal locations: on the campuses of Cal Poly Pomona, Chapman College in Orange and UC Irvine; and at John Wayne Airport in Santa Ana.
In the city of San Diego, there are only two QDOBA locations. One is on Camino de la Reina in Mission Valley, which opened in 2020 (and about a mile away from company HQ, where it shares space with Chosen Foods). The other site is in Terminal 2 at the San Diego International Airport, where it’s been since August 2013.
Countywide, there are QDOBAs on the campus of Cal State San Marcos and at Camp Pendleton.
QDOBA Chief Development Officer Jeremy Vitaro said San Diego will likely see four new dining establishments in the next year, some of which are in the development process and waiting on final permitting.
New Owners, New Leadership
Spearheading growth and change for the company including new leadership has been pushed forward by Beverly Hills-based Butterfly Equity, which acquired the company in 2022.
Butterfly Equity was quick to move with industry veterans. In January 2023 Cywinski was hired to head Los Angeles-based Modern Restaurant Concepts (parent to Qdoba, Modern Market Eatery and Lemonade brand). In March of this year, the company added Vitaro as CDO and Head of International; and in October announced a new Chief Operating Officer in Kevin Carroll.
Cywinski was previously president of Applebee’s U.S. and before then served as president of KFC; Vitaro came from Little Caesars Pizza where he was CDO for three years and prior to that was at Dunkin’ brands for 18 years; and Carroll was COO at Applebee’s the previous seven years, and before then had a 27-year career at Chili’s Grill & Bar, leaving as its senior VP.
“I felt it was the perfect time for me to join Qdoba with the future growth the brand is positioned for,” Carroll said. “While I loved Applebee’s, the opportunity to help create a sustainable culture of operational excellence, as the brand doubles, I found to be incredibly challenging and exciting.”
Mexican Food, QDOBA Growth
Technavio Research reports that Mexican food has never been more popular, with a growing number of consumers embracing it, including in North America, where 58% of the market’s growth is expected to originate.
The Mexican food market is positioned to grow by $113.85 billion through 2026, with a compound annual growth rate (CAGR) of 6.65%, according to the research group.
And just as burritos, tacos, quesadillas and nachos gain new fans and retain current customers, in QDOBA’s FY (starting Oct. 1, 2023 and ending Sept. 30 2024), the privately owned company reported a 7.7% comp sales increase on top of last year’s 6.3% comp sales increase.
The increase is one of the best in the industry, Cywinski said.
“And our profit, which is a component of sales basically how many people are coming into our restaurants versus a year ago, our profit traffic was up about 5%. And those metrics are in rarified air.”
Vitaro, said that the demand for Mexican fast-casual dining continues to surge, boding well for QDOBA.
“QDOBA is well-positioned to meet that demand while offering an exciting investment opportunity for franchisees,” Vitaro said. “Our year-to-date successes are a testament to the strength of our brand, driven by innovative offerings and an unwavering commitment to quality. With strategic incentives and unmatched franchisee support, QDOBA is the ideal partner for operators looking to expand in this dynamic market.”
More enhancements in key markets are coming for QDOBA, which has had some significant new agreements.
Thrive Restaurant Group, a large multi-unit Applebee’s franchisee, has committed to developing 30 restaurants in North and South Carolina; Q Eats LLC, a multi-unit IHOP franchisee, signed on for 15 restaurants across Houston; and former Wingstop franchisee Golden Maize Restaurants, LLC, is planning five new locations in New York.
Leveraging their success with Dunkin’ franchises, Cafua Management Company and Mountain View Management are expanding into QDOBA with five new restaurants in Pennsylvania. Vitaro said Cafua anticipates further growth across Pennsylvania, New Hampshire, and other markets aligned with its operations.
Earlier this year, QDOBA announced other multi-unit franchise partners in major markets including Portland; Chicago; Greensboro, North Carolina; Reno and Washington, D.C.
QDOBA has an international footprint as well, continuing a partnership with the Army & Air Force Exchange Services to open its first-ever locations in Asia. The company plans restaurants at military bases in Japan and South Korea.
