Qdoba is going into overdrive and betting on franchising to grow its footprint.
The quick-service Mexican restaurant, which currently has 750 locations, expects to double in size during the next decade. Qdoba plans to open 40 new restaurants this year, followed by 60 in 2024. Starting in 2025, it will open 80-plus locations.
In August 2022, Qdoba was acquired by Butterfly Equity from Apollo Global Management. The chain was subsequently merged with Butterfly Equity’s Lemonade and Modern Market Eatery banners to form Modern Restaurant Concepts. (All three operate as separate brands.)
"Qdoba is an exceptionally well positioned brand in one of the most attractive restaurant categories,” said John Cywinski, CEO of Modern Restaurant Concepts, parent company of Qdoba. “We possess long-standing momentum, strong unit economics, a compelling operating model, an extraordinarily passionate guest following, and significant untapped geographic potential.
Qdoba is currently 80% franchised with 85 franchise partners in the U.S.
“We are in the process of aggressively accelerating new restaurant development in partnership with existing and new franchisees,” Cywinski added. “Once our pipeline is fully established, we expect to sustain a 10% annual growth rate through new restaurant development.”
In keeping with its selective refranchising strategy, Qdoba recently sold 77 company-owned restaurants to existing franchisee, North Fork Fresh Mex, which now operates 97 Qdoba locations Missouri, Illinois, Indiana, Kentucky, and Virginia. North Fork has also committed to build 73 new restaurants during the next seven years and is now the chain’s largest franchise partner.
Qdoba has now posted 10 consecutive quarters of positive comp sales growth, with average unit volumes of $1.6 million.