Qdoba Seeks to Double Its Store Count Under Ex-Applebee’s CEO

Published on: January 12, 2023 at 6:30am CST
Written by: Leslie Patton
Article Source: Bloomberg

Qdoba, the Mexican-themed restaurant chain recently acquired by Butterfly Equity, named former Applebee’s head John Cywinski as its chief executive officer on Thursday.

Cywinski, whose appointment is effective immediately, will be leading growth plans for the chain that competes with Chipotle Mexican Grill Inc. and other fast-casual eateries. Cywinski will lead a group of brands under the Modern Restaurant Concepts name, which includes Qdoba, along with Modern Market Eatery and Lemonade.

Qdoba, which has about 730 locations in North America, was purchased in August by Beverly Hills, California-based Butterfly Equity for an undisclosed amount. Cywinski said it’s “realistic and achievable” to expand to around 2,000 stores over the next decade.

“We plan to think big and bold with Qdoba,” he said in an interview. 

Cywinski plans to grow through franchising, while also selling some company locations to independent operators. Right now, about 62% of Qdoba locations are franchised, but Cywinski said that will rise to around 90% or more in the near future. 

“My goal is to re-franchise a meaningful percentage of this business,” he said. “I believe in an asset-light model. And that’s not just because of uncertainty and volatility in the marketplace, I just believe in franchisees.”

Many big restaurant brands are increasingly relying on franchisees for growth while limiting their tally of company-operated locations. The parent companies can then focus on revenue from royalty fees and development while being relatively sheltered from rising labor and food costs. 

Cywinski, who’d previously been president of the heavily franchised Applebee’s chain for six years, helped expand sales at the casual-dining brand. He revamped marketing and menus with items such as skillet entrees, along with discounted appetizers and bar drinks. Applebee’s has also recently started operating drive-thru windows.

Parent company Dine Brands Global Inc. said last week that Cywinski, 57, was leaving Applebee’s to become CEO of another restaurant company. He’s also served as president of KFC, owned by Yum! Brands Inc., and was a franchisee himself, owning Dunkin’ and Sonic restaurants in the past.

The restaurant industry has been heavily hit by ingredient and wage inflation in recent years. Meanwhile, there are signs that US consumers are pulling back on spending as economic conditions worsen. 

Cywinski said that higher costs will persist this year, although the rate of increase will be lower than in 2022. “I see a gradual deceleration of inflation really in the back half of 2023, and most certainly in 2024,” he said. 

“It’s been a tough two years for the industry,” Cywinski said. “The good news is that it will improve and it will get better. I don’t see us reverting back to the peak of inflation.”

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