The San Diego-based Qdoba chain, at one time owned by Jack in the Box, has announced it will be bringing 17 new restaurants to the county, with the help of a new franchising partner.
The company expects that the additional locations could come on line over the next seven to 10 years, although it was unable to provide more precise timing, nor was it able to disclose any details on where in the county any of the new outlets would be located.
In a Wednesday news release announcing the new plans, Qdoba Mexican Eats said it had signed a development deal with San Diego-based franchisee Hyperion Brands, LLC, which also is a multi-unit operator of Habit Burger & Grill.
The expansion marks a big change for the county, considering that Qdoba barely has a presence here, despite having its headquarters located in Mission Valley. The chain has just one storefront location open to the general public in San Diego — in Mission Valley. It also operates venues at the San Diego Naval base, Camp Pendleton, the San Diego International airport, and on the campus of California State San Marcos.
“Qdoba is pursuing a disciplined approach to nationwide expansion,” said Jeremy Vitaro, Qdoba’s chief development officer, in an emailed response to questions from the Union-Tribune. “We now operate approximately 875 restaurants across 46 states. We plan to double our footprint with 100 restaurant openings annually in the years ahead.
“That kind of sustained momentum gives an experienced operator the confidence to scale with the brand. California is a priority growth market for us, and San Diego County has real runway. Hyperion is the right partner with a hometown advantage.”
The planned growth effort in San Diego follows an agreement Qdoba forged earlier this year to introduce the fast casual brand to Ventura and Santa Barbara counties. The company says it has seen growing demand in a variety of California locations, including Bakersfield, Sacramento, San Bernardino and the San Francisco Bay Area.
While San Diego County has no shortage of fast casual Mexican restaurant chains, large and small, Vitaro does not see that as an impediment to Qdoba’s growth here.
“Fresh food and great value set us apart,” Vitaro said. “We flame-grill our chicken and steak and prepare fresh ingredients in-house. That includes our hand-crafted guacamole, which is free on any Create Your Own entrée, versus an upcharge elsewhere in the category. Mexican fast casual is one of the strongest segments in restaurants, and demand is not consolidating around one or two names. San Diego County includes several trade areas that are underserved today. We are focused on giving guests a genuinely different option where they do not have one.”
The company says it believes its growth plan is appealing to franchisees because it gives them an avenue for moving into the fast-growing Mexican fast-casual sector. Qdoba, in turn, will support the franchisees with a modern digital operating platform and national marketing support, it said.
Cesar Shih, CEO and co-founder of Hyperion Brands, was unable to say when San Diego can expect the first new Qdoba outlet but noted that the restaurants will open in phases.
“Demand for the brand has been overwhelming, both from local communities and from landlords and brokers,” he said in an email. “The strong interest we are seeing has reinforced our confidence in the brand and created significant opportunities for expansion. Our timeline will depend on finalizing locations, permits, construction, and other operational requirements.”
Expanding the brand here makes sense, even in a competitive marketplace, says San Diego restaurant consultant John Gordon, of Pacific Management Consulting Group.
“Qdoba is growing nicely as the No. 2 fast casual Mexican concept,” he said. “It does have some product differences from Chipotle and has some milder salsa flavors. Site selection in San Diego for the right sites will require a lot of work. Chipotle has 14 units already in San Diego. They may opt not to go head-to-head with another Chipotle unit close by, although that does work fine in Mission Valley. In other smaller markets, that will be more problematic.”
According to Qdoba’s website, the initial investment for a franchisee to open a Qdoba store can range from $234,500 to nearly $1.3 million.
Up until nine years ago, Qdoba was owned by Jack in the Box, but it divested itself from the chain in 2017 when it sold the chain to Apollo Management Company amid pressure on Jack in the Box from an activist shareholder. In 2022, the chain was sold to yet another private equity firm — Butterfly Equity, the parent company of the Modern Market and Lemonade brands.
Dining and Cooking