Mexican Food Franchises Show Strong Popularity Growth

While politicians wrangled over the Mexican-U.S. border situation in 2006, one thing remained certain: people on both sides of the border love Mexican food. Americans have come a long way from Taco Bell, embracing Mexican food more and more each year, in all its flavors and variations.

Add to that the nation's rapidly expanding population from south of the border, and Mexican food is here to stay-whether fast food, quick serve restaurants (QSR), fast casual, or casual-opening up windows of opportunity franchisors and franchisees can't leap through fast enough. And, if you like, you can even eat your way through your day ordering only Mexican food.

Start your day with a fast food breakfast burrito at Taco Bell. By far the longest and best-known brand in the Mexican QSR segment, Taco Bell, a subsidiary of Yum! Brands, led the segment in sales with $3.8 billion in its franchised restaurants (more than 80 percent of its nearly 6,000 sites are owned and operated by independent franchisees).

Even McDonald's is offering burritos on its breakfast menu these days-and if you're on the road, try the burger giant's spinoff brand: Chipotle Mexican Grill. While not a franchise, the fast casual brand is riding high as Mexican and Mexican-themed restaurants continue to catch on nationwide. In early 2006, Chipotle took its 500 stores and $628 million in sales (2005) public, and plans to open 80 to 90 new restaurants by year-end.

It seems the traditional burger joints have all joined the fiesta. Wendy's acquired Baja Fresh Mexican Grill in 2002 for $275 million; Baja Fresh Franchise Partners owns and operates more than half of the brand's 300-plus restaurants. In 2003, Jack in the Box acquired Qdoba Mexican Grill; Qdoba began in Denver in 1995 serving fast-casual Mexican fare and has more than 200 units today.

Mexican food chains serving the traditional tacos, burritos, and beans have been popular since the 1960s. Many originated in the Midwest and Sunbelt states and remained regional. Today's brands are different, adding elements such as upscale interiors, fresh and healthy menu choices, and plans for nationwide expansion.

To experience the brand writing the (best-selling) book on explosive growth, visit a Moe's Southwest Grill. Founded in December 2000, the brand had signed 800 units as by mid-2006. Moe's is owned by Atlanta-based Raving Brands, which also owns seven other food and beverage concepts.

La Salsa Fresh Mexican Grill, opened in 1979, adds an element of fun and entertainment to the Mexican dining experience. Its 100-plus quick casual restaurants feature a display kitchen and a fresh salsa bar customers can visit to spice up their orders. And yes, the brand is owned by a hamburger franchisor: CKE Restaurants, better known for Carl's Jr. and Hardee's. As if that's not Mexican enough, Carl's Jr. now dual brands with Green Burrito, offering both burgers and burritos under one roof.

For lunch, drop in at any of the many fast food or fast casual Mexican restaurant brands. Try Taco Tico, whose first restaurant opened in 1962 in Wichita, Kansas, and has been franchising since 1967; in June 1988, the brand was acquired by a group of investors led by George Baker, former president of Kentucky Fried Chicken. Tired of Mexican? Taco Tico also offers combination units with Simple Simon's Pizza (which has about 240 stores in 10 states on its own). Or, for a flavor variation, visit one of 400 Taco John's, founded in 1969 in Cheyenne, Wyoming, and offering its "West-Mex" theme in more than 27 states.

Depending on where you live or travel in the country, choices abound. Panchero's Mexican Grill, with 32 stores mostly in the Midwest, has a lunch-to-dinner ratio of 60/40 percent, so you can stop in there either time of day to sample their menu. Panchero's plans for about 50 stores opened by end-2006 and 70 to 75 by end-2007. Or try Tecate Grill, serving fast casual since 1989; Taco Palace for Tex-Mex; Taco Time for a quick serve lunch; or go international with The Taco Maker, founded in 1978, based in Ogden, Utah, and serving up franchised Mexican QSR fare in the U.S., Latin America, and the Far East.

Salsarita's Fresh Cantina, founded in 2000 and based in Charlotte, N.C., features "Fresh-Mex" food fast in a fun, casual atmosphere where customers can watch their meals prepared. Or try an even newer brand, like Costa Vida Fresh Mexican Grill, a fast casual franchise founded in 2003 in Utah.

Fast-growing Tijuana Flats, a Tex-Mex fast casual concept based in Orlando, Florida, added 18 units in 2005, bringing its growing total to 39 by first-quarter 2006. Tijuana Flats is seeking multi-unit operators to expand, as is Salsarita's.

If you're looking to franchise in a smaller city or town, talk to the folks at Taco Palace, a Tex-Mex brand based in Monett, Missouri. Founded in 1985, Taco Palace focuses on towns with populations of 4,000 to 10,000. When the company opened in Ladysmith, Wisconsin (pop. 3,834), Taco Palace was the town's first Mexican restaurant. Taco Palace also co-brands with Simple Simon's Pizza.

For more exotic taste and theme variations, go west. Taco Del Mar, started in Seattle in 1992, features fish tacos in its California surfing-themed Mexican restaurants. And Hawaii-based Maui Taco's fast-casual theme fuses traditional Mexican with island-based flavorings and decor. Founded in 1993, Maui Taco arrived on the mainland in 1998, and has 21 units open with 45 more under development. Juan's Mexicali, a fast casual brand, offers a Baja twist, complementing its traditional fare with mahi-mahi tacos, salmon wraps, three-cheese spinach and artichoke quesadillas, and Mexican Cobb salads.

Got kids? In New Jersey, it's the Blue Moon Mexican Café, now franchising after 20 years and 5 company stores. Blue Moon positions itself a "high quality café-style neighborhood restaurant franchise" with a child-friendly atmosphere.

For dinner, take a drive to On the Border Mexican Grill & Cantina, a casual dining restaurant chain founded in 1984. On the Border is owned by Brinker International, which also owns Chili's Grill & Bar, Maggiano's Little Italy, Rockfish Seafood Grill, and Romano's Macaroni Grill. Or try Qdoba for non-traditional, fast-casual Mexican dining.

Another good choice for lunch, dinner, drive-though, or take-out? El Pollo Loco, with nearly 350 restaurants at the end of its fiscal 2005 (March 2006). Acquired by Trimaran Capital Partners in late 2005 for a reported $400 million, El Pollo Loco is rapidly expanding beyond its southern California base across the U.S. through multi-unit deals, including in El Paso and Chicago, and reports 145 franchise restaurant commitments in California, Colorado, New England, New Jersey, New York, Oregon, Texas, and Washington.

Feeling stuffed as a new piñata? Don't forget dessert. If you're lucky enough to be in the San Francisco Bay Area, track down Churro Station in San Rafael, to visit the nation's first QSR food franchise serving authentic, freshly made churros and rellenos. (Churros, twisted ropes of fried dough about 3/4-inch thick and 8 inches long, are light, crispy, and dusted with cinnamon sugar; rellenos are wider, longer, and stuffed with sweet, tasty fillings.) Both are ¡Estupendo! with Churro's Mexican hot chocolate. The first franchise was set to open by mid-2006, with plans for 8 by year-end and up to a dozen more in 2007, and will also sell tostadas and sandwiches. Muy yum!

P.S. - Can't sleep? In April 2006, Taco Bell introduced a late-night offering called Fourthmeal.