Fuzzy's Taco Shop interior
UPDATE: CLICK HERE TO READ THE 2022 MULTI-UNIT REPORT
By Ed Avis
COVID has been the big story across the restaurant industry over the past year, and the crisis damaged many multi-unit Mexican restaurants. But for many of the 50 largest Mexican multi-units, the damage was less than for many smaller operators. In fact, 15 of the top 50 added units in 2020, by our counts (see the Top 50 chart at the bottom of this article).
Why is this? Because many of them are quick service or fast casual restaurants that were already set up to offer to-go and delivery service. Seventeen of the top 50 have drive-throughs at most or all of their locations, which means they were easily serving customers during even the worst days of the pandemic. And a majority of them – 34 out of 50 – have patios as part of their store design, allowing them to serve clients on-premise even when dining rooms were shut down.
Below are the stories from two Mexican multi-units that thrived during the past year, Bubbakoo’s Burritos and Fuzzy’s Taco Shop.
Bubbakoo’s Keeps Growing
Bubbakoo’s Burritos leapt from 42nd place in the 2020 Top 50 list to 34th in this year’s list. The New Jersey-based chain added 15 locations in 2020, a remarkable feat given the conditions.
“Initially, we paused all development strategies and focused on our employee’s safety, customer’s safety and our franchise partners getting the PPP monies in their hands to maximize liquidity as the whole world was trying to figure out what would be next,” says Chris Ives, the company’s vice president of finance. “Once business normalized mid-summer, we re-engaged on the development side and we have been fortunate enough to grow internally with our current partners wanting more, as well as prospects in new markets looking to diversify. We closed the year with a record year for us on sales comps greater than 30 percent.”
Bubbakoo’s, which is known for its customized burrito offerings, currently has 47 locations, most of which are in New Jersey and other eastern states. The restaurant had a strong off-premise program prior to COVID hitting, and they overhauled their digital ordering platforms to make it easier for their fans to customize orders online.
“Overall, operations remained consistent pre/post COVID as we were already doing delivery, order ahead and 3rd party marketplace, but we shifted our focus to executing on the delivery/take out part of the business,” Ives says. “We used our loyalty program to communicate with our guests on a daily basis, whether it was safety standard, promotions, or updates, we were able to speak to our customers directly.”
The new year has started well for the company. They added three more locations in January, and 30 more are set to open before the end of the year. The goal is to build at least 80 more units in the next three years, Ives says. That would bring store count to about 130 locations, which would launch them into the top 20 largest Mexican multi-units.
“Our partners and employees continue to drive our business with their passion for the brand, as well as executing on our operational excellence, which is what really gets us excited,” Ives says.
Fuzzy’s Taco Shop Grateful for Patios
When COVID crashed the restaurant world in March, the leaders of Fuzzy’s Taco Shop took decisive action.
“The first week of the pandemic we made two goals for our team: One, we weren’t going to panic and we were going to control our own destiny; and two, we would release one or two programs a week until our dining rooms were full again,” says Jessica Wescott, the company’s chief operating officer and chief financial officer.
The list of steps Fuzzy’s took to get revenue flowing is long: They improved their online ordering platform, launched curbside pick-up, and greatly expanded their relationships with third-party delivery providers. Prior to COVID only about 40 percent of locations offered delivery; now 80 percent use DoorDash and 40 percent use UberEats. It’s no surprise then that off-premise sales jumped from 22 percent in 2019 to 82 percent in 2020.
Still, COVID took its toll in the early months. Wescott says the company saw significant revenue declines at first. But, like many Mexican restaurants, Fuzzy’s got a huge boost from Cinco de Mayo.
“Cinco de Mayo was a huge turnaround for us,” Wescott says. “We got killed in the kitchens, but in the good way.”
As the weather warmed up, the fact that all Fuzzy’s locations have patios proved a great advantage.
“We already had a strong customer base that was used to coming to our patios and enjoying margaritas,” Wescott says. “And with everyone being home so much more, we started seeing the Thursday happy hour bleed into Wednesday, and eventually into Taco Tuesday.”
Fuzzy’s has 140 locations spread in a giant triangle from Texas to Minnesota to Florida. That large swath of geography means its stores –136 of which are franchise locations – recovered at different paces.
“For example, in the Southeast we’ve recovered more quickly than in the Midwest,” Wescott says. “In the Texas market we’re actually up so far in 2021 over last year and flat compared to 2019, and that’s with Texas still at 50 to 75 percent capacity.”
Optimism among Fuzzy’s leadership is strong enough that the company is trying out a new concept this year. Fuzzy’s Taco Shop Taqueria will be 1,500 to 2,000 square feet, about half the size of a normal Fuzzy’s, which will allow the company to take advantage of smaller real estate. The recipes will be the same but the menu will be limited to favorites.
“We’re opening the first one in Minneapolis in March,” Wescott says. “We’re looking at opening four total this year, and we hope to get to about 40 percent of our openings being taquerias. We expect them to be more heavily to-go, but it’s still going to be the great experience Fuzzy’s offers.”
Other Multi-Units Redesigning
Fuzzy’s isn’t the only member of the el Restaurante Top 50 list to try something new. At least two other big multi-units announced new store designs recently.
El Pollo Loco, which has 480 units, announced in December that they are launching two new designs. One nixes the dining room altogether, instead serving customers with a take-out window, a dual drive-through, dedicated curbside pick-up parking spaces, and patio seating. The other design is similar but includes a small dining room that opens up to an expansive patio.
Both new designs feature an enhanced digital experience, including cubbies for mobile to-go orders, digital menu boards in the drive-throughs, and GPS-enabled curbside pick-up. Murals, imagery and city maps on the exterior and interior walls will honor the brand’s Los Angeles roots.
“To compete in a COVID world, we knew we needed to create a unique concept that is anchored in technology, accessibility, and modern design elements infusing our brand history to make it easier and more rewarding to be a customer,” said Brian Carmichall, El Pollo Loco’s chief development officer in a press release.
Del Taco announced its new Fresh Flex store design in January. It includes third-party delivery pick-up stations, double drive-through lanes and dedicated parking lots for pick-up orders. On the inside, built-in transparent coolers and an open kitchen format help customers see the “Fresh as Del” concept. The company is offering various buildout options to franchisees ranging from 1,200 to 2,400 square feet.
“We put a major emphasis on optimizing kitchen efficiency. It is the production engine of our brand, so each new restaurant size scales around the kitchen,” said Del Taco Chief Operating Officer Chad Gretzema in a press statement. “The operational enhancements in the kitchen as well as in the front of the house strengthen our four-wall economics.”
Ed Avis is the publisher of el Restaurante magazine. Reach him at edavis@elrestaurante.com
2021 Top 50 Mexican Multi-Units
About Our Data
The information that allows us to create the Top 50 Mexican Multi-Units list comes from several sources. It starts with data from restaurantdata.com, which compiles multi-unit information year around. In many cases, we further refine the data by visiting the multi-units’ websites, reviewing their press or investors’ material, and talking with company representatives. The numbers are not 100 percent accurate – chains open and close locations constantly – but we believe they are the most accurate available.