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Qdoba

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Qdoba Restaurant Corporation
Qdoba Mexican Eats
Formerly
  • Zuma Fresh Mexican Grill (1995–1997)
  • Z-Teca Mexican Grill (1997–1999)
  • Qdoba Mexican Grill (1999–2015)
Company typePrivate
IndustryRestaurants
GenreFast Casual
Founded1995; 29 years ago (1995) as Zuma Fresh Mexican Grill in Denver, Colorado, U.S.
Founders
  • Anthony Miller
  • Robert Hauser
Headquarters350 Camino De La Reina #400, San Diego, California, United States
Number of locations
750+ (as of 2023)[1]
Area served
Key people
ProductsBurritos, tacos, quesadillas, nachos, taco salads
OwnerButterfly Equity[3]
Number of employees
Over 16,000 (2023)[4]
Websitewww.qdoba.com

Qdoba (/kjuːˈdoʊbə/ kew-DOH-bə)[5][6][7] is a chain of fast casual restaurants in the United States and Canada serving Mexican-style cuisine. After 15 years as a wholly owned subsidiary of Jack in the Box, the company was sold to a consortium of funds led by Apollo Global Management in March 2018. In October 2022, Qdoba was acquired by Butterfly Equity. At the time of the acquisition, Qdoba had nearly 750 locations across North America. It is the No.2 player and No.1 franchisor of Mexican fast-casual dining in North America.[8]

History

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This chain traces its origins to the opening of the Zuma Fresh Mexican Grill in 1995 by Colorado native Anthony Miller and partner Robert Hauser at Grant Street and Sixth Avenue in Denver, which is still in operation.[9][10]

Interior of a Qdoba restaurant, Woodbridge, Virginia

Miller and Hauser met in New York City, where Miller was an investment banker with Merrill Lynch, and Hauser attended the Culinary Institute of America, working at the famed Le Cirque restaurant. Hauser developed most of the recipes, designing the menu to be healthier by replacing traditional animal fats with vegetable oils and using more fresh vegetables and herbs.[11] During the first year, lines stretched out the door most evenings, but it usually took roughly seven minutes for customers in a 30-person line to be served.[12] Zuma was a made-up name but was also the name of a friend's cat.[10][13]

The Denver, Colorado, location was an immediate success, with first-year revenues exceeding $1,500,000. The cost of opening the 1,300-square-foot (120 m2) store had been only $180,000.

In 1997, the name of the company was changed from Zuma to Z-Teca Mexican Grill because of a lawsuit from another restaurant using Zuma in Boston and confusion caused by the similar-sounding name of a chain that was operating in the Denver area at that time, ZuZu Handmade Mexican Grill.[14][15] During the same year, Z-teca began to offer franchise opportunities to entrepreneurs to expand the chain outside of its core territory of Colorado.[16]

In exchange for a large stake, Western Capital and other investors gave the company a large infusion of capital in early 1998 to allow the company to open 25 new locations and nearly triple its size.[17] Later that year, Gary Beisler was hired to replace Miller as president and chief operating officer, while Miller remained chief executive officer.[18][19] By mid-1998, Z-Teca had 21 locations in 9 states,[20] with 10 of those locations being franchises.[21] At that time, a chicken burrito cost only $4.79.[20] By December 1999, Z-Teca had 49 locations in 19 states.[18]

Even though Z-Teca was another made-up name, there were lawsuits by Z'Tejas Southwestern Grill in Arizona and Azteca in Washington state claiming that Z-Teca was too similar to their names and infringed upon their trade names. To overcome these problems, Qdoba was invented in 1999[22][13] by ad agency Heckler Associates.[23][24] At the time of the name change to Qdoba Mexican Grill, Gary Beisler replaced Miller as CEO.[18]

Jack in the Box paid $45 million in cash to obtain the Wheat Ridge–based[25] Qdoba from ACI Capital, Western Growth Capital, and other private investors in early 2003.[26][27][28]

Qdoba repurchased 25 stores located in Kentucky, Indiana, and Tennessee from ZT of Louisville, Inc., one its largest franchisees, for an undisclosed sum in mid-2012.[29] Tim Casey replaced Gary Beisler as CEO in March 2013.[30]

In October 2012, Beisler announced his retirement[31] and was replaced the following March by Tim Casey.[30][32] Three years later, Casey was replaced as brand president by Keith Guilbault in May 2016.[33]

In June 2013, Qdoba announced it would close a total of 67 underperforming restaurants, including 18 in and around Chicago.[34] By late 2013, Qdoba operated over 600 fast-casual restaurant locations throughout the United States.[35]

In October 2014, Qdoba changed its price structure to "all-inclusive", in which the price only depended on the type of protein ($7.80 for chicken or vegetarian items and $8.40 for steak, shredded beef or pork), but included all of the "extras" that previously incurred an additional charge, such as guacamole and queso sauce.[36][37] Thereafter, most people who routinely ordered the "extras" with their burritos did not see much of a price difference. However, light eaters complained that if they wanted to maintain their light eating habits by ordering a simple item, they were hit with as much as a $2-per-item price increase (as an example, the Craft 2 which went up to $8.40 from $6.49) by paying for items they did not want (like the guacamole), subsidizing other customers who previously paid for the "extras".[38][39][40]

In 2014, Qdoba moved its headquarters from its longtime home in Wheat Ridge to nearby Lakewood.[41] A little over two years later, San Diego–based corporate parent Jack in the Box decided to integrate Qdoba's headquarters into Jack in the Box's main headquarters in California starting in January 2017.[41][42][43]

Faced with sluggish growth, management decided to make a change in their marketing strategy. As part of the new strategy, the trade name of the restaurants was changed to Qdoba Mexican Eats in October 2015 in the hope of trying to distinguish itself from similar-sounding competitors.[44][45]

By July 2016, the company had 650 restaurants in 47 states, the District of Columbia, and Canada.[43]

In December 2017, a consortium of funds led by Apollo Global Management announced the purchase of the Qdoba chain for approximately $305 million. At the time of the announcement, Qdoba had approximately 700 restaurants in 47 states.[46] The sale was completed in March 2018. Jack in the Box Inc. received $305 million in cash for more than 700 locations in 47 states, the District of Columbia and Canada.[47] After Apollo had complete its acquisition, Keith Guilbault was promoted from brand president to chief executive officer in May 2018.[48]

In June 2019, Qdoba finally moved its headquarters from the building that it had previously shared for the past two years with its former corporate parent Jack in the Box in Kearny Mesa to the Amp&rsand building in Mission Valley.[49]

In 2021, Qdoba promoted tenured operating officer Eric Williams to chief operating officer, a position he still holds.[50]

By May 2022, Qdoba operates over 750 fast-casual restaurant locations throughout the United States, with 12 locations in Canada.[51]

In October 2022, Qdoba was officially acquired by Butterfly Equity via a merger transaction with Modern Restaurant Concepts ("MRC"), an industry-leading "better-for-you" fast casual restaurant platform consisting of two brands: Modern Market Eatery and Lemonade. At the time of the acquisition, Qdoba had nearly 750 locations across North America.[8]

In January 2023, it was announced that effective immediately, former Applebee's president John Cywinski would be CEO of Modern Restaurant Concepts, Qdoba's parent company.[2]

Butterfly Equity Ownership

[edit]

Qdoba is owned by Modern Restaurant Concepts, a fast-casual restaurant platform that is a portfolio company of Butterfly Equity.[8] Butterfly Equity is a Los Angeles, California-based private equity firm specializing in the food sector.[8] Under Butterfly's ownership, Qdoba has opened 40 restaurants in 2023 as of August, and plans to open 60 restaurants in 2024 and over 80 annually beginning in 2025. Through a selective refranchising strategy, the company sold a portion of company-owned restaurants to franchisees to achieve a franchised mix of ~80% as of August 2023.[52]

International

[edit]

The first Canadian location opened on December 3, 2012, in Brandon, Manitoba.[53] A second location was opened in London, Ontario, three months later.[54] A third location opened in Winnipeg in 2014.[55] As of October 2023, there are 12 locations in Canada and no locations exist in any other country.[1]

Fare

[edit]
Qdoba Mexican Grill on Andover St. in Peabody, Massachusetts

Qdoba serves burritos made in the San Francisco burrito style,[56] and other foods such as tacos, quesadillas, chile con queso and tortilla soup. The restaurant fits into the "fast casual" category, offering both quick service and a higher quality of food than typical fast-food restaurants. Customers order by selecting an entrée then choosing its ingredients. All of the items are made in plain view of the customer.

To distinguish itself from some of its competitors, Qdoba serves breakfast, and some locations are open 24 hours on weekends.[35]

Qdoba has also opened restaurants in non-traditional locations, such as directly on college campuses, and participates in some college meal plans.[57][58][59]

Through agreements with the Army & Air Force Exchange Service, Qdoba can be found on select U.S. military bases across the nation.[60]

Competition

[edit]
A Qdoba Mexican Grill in Eden Prairie, Minnesota

The main national rivals[61] to Qdoba are Chipotle Mexican Grill (which also started in Denver, two years before Qdoba), Baja Fresh, Moe's Southwest Grill and, to a lesser extent, Panchero's Mexican Grill, Salsarita's Fresh Mexican Grill, and Rubio's Coastal Grill.

Incidents and lawsuits

[edit]

White City Shopping Center

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In 2006, the company was involved in a lawsuit in which Panera Bread attempted to invoke a clause in Panera's contract with the White City Shopping Center in Shrewsbury, Massachusetts, to stop the opening of a Qdoba Mexican Grill. The clause provided that Panera would be the only sandwich shop in the shopping center. Panera argued that burritos and other tortilla-based foods were, in fact, sandwiches. Superior Court Judge Jeffrey Locke ruled against Panera, concluding, "A sandwich is not commonly understood to include burritos, tacos and quesadillas, which are typically made with a single tortilla and stuffed with a choice filling of meat, rice, and beans."[62][63]

2015 typhoid incident

[edit]

Three customers who got sick after eating at a Qdoba restaurant in Firestone, Colorado, were found to have been infected with the bacterium Salmonella typhi which causes typhoid fever. Two of the customers had to be hospitalized. The source of the infection was traced to an infected food handler who was asymptomatic.[64][65]

Violation of child labor laws

[edit]

In 2019, a minor filed a complaint to the General Attorney's Office at Newton, Massachusetts, stating that they had worked overtime at Qdoba. This led to a state-wide investigation that resulted in auditing all locations in Massachusetts. Qdoba paid over $400,000 in citations due to the thousands of violations they received due to Massachusetts' child labor laws.[66]

Glenwood Springs food contamination

[edit]

In 2020, four customers were hospitalized after consuming contaminated food in Glenwood Springs, Colorado. The food was contaminated by an unspecified chemical. Only two out of the four customers experienced symptoms.[67] The incident caused Qdoba to close down temporarily. After the release of the individuals, Qdoba reopened. No action was taken by the individuals.[68]

See also

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References

[edit]
  1. ^ a b 768 QDOBA LOCATIONS in North America. Retrieved October 2, 2023.
  2. ^ a b Former Applebee's Leader John Cywinski Named CEO of QDOBA
  3. ^ "Butterfly to Acquire QDOBA and Form Leading Fast Casual Restaurant Platform Through Merger with Modern Restaurant Concepts" (Press release). August 9, 2022.
  4. ^ "About us".
  5. ^ "Ask Our Chef - How to Pronounce Qdoba". Qdoba Mexican Grill. Archived from the original on September 4, 2009. Retrieved October 20, 2010.
  6. ^ @Qdoba (January 31, 2013). "@the_meltz Q Doh Bah (kew-doh-bah)" (Tweet). Archived from the original on October 28, 2015 – via Twitter.
  7. ^ Martin, Don; Martin, Betty (2001). The Best of Denver and the Rockies. Las Vegas: DiscoverGuides. p. 89. ISBN 0-942053-35-4 – via the Internet Archive. Qdoba (pronounce it cue-DOUGH-bah) ...
  8. ^ a b c d Butterfly to Acquire QDOBA and Form Leading Fast Casual Restaurant Platform
  9. ^ Parker, Penny (September 9, 1995). "Restaurant rush taking a breather?". Denver Post (Rockies ed.). pp. D-01. Here's a list of other eateries that will soon compete for diners' dollars... Zuma - A big-burrito place opening at Grant Street and Sixth Avenue
  10. ^ a b Cox, Jack (December 21, 1995). "Devouring a Dream Financier, chef concoct winning restaurant". Denver Post (Rockies ed.). pp. E-01.
  11. ^ St. John, Bill (November 17, 1995). "Bagels to Burritos, All You Need to Eat at 550 Grant St". Rocky Mountain News (Final ed.). p. 24D. Zuma turns out Denver's favorite sort of nueva cucina Mexicana: burritos the size of Orson Welles... While it will take some doing to knock Chipotle off the crown of the hill, Zuma isn't just a copy cat... One of Zuma's partners, Bob Hauser, graduated from New York's Culinary Institute of America. He does most of Zuma's cooking, and the skill shows... Zuma relies less on lard or animal fats to carry flavor and more on polyunsaturated cooking oils and fresh herbs and spices. It's a good idea and a tasty one, to boot.
  12. ^ Parker, Penny (June 10, 1996). "Giant burritos invade trendy eateries' scene". Denver Post (Rockies ed.). pp. E-01.
  13. ^ a b Pate, Kelly (December 15, 1999). "Z-Teca changing its name Lawsuits prompted burrito chain switch". Denver Post.
  14. ^ Parker, Penny (February 16, 1995). "ZuZu opening 35 health-Mex outlets in Colorado". Denver Post (Rockies ed.). pp. C-1.
  15. ^ Cox, Jack (December 31, 1996). "Expansion excites restaurant owners". Denver Post (Rockies ed.). pp. E-02.
  16. ^ Parker, Penny (June 11, 1997). "Z-Teca to franchise restaurants Denver chain's first deal will put 12 big-burrito stores in Phoenix area". Denver Post. pp. C-02. The restaurant company, based in Denver, has registered to sell franchises in 40 states, said co-founder Tony Miller. In its first franchising deal, Z-Teca has signed with a group in Phoenix to open 12 stores, and the company is currently negotiating with groups in three other states to franchise 10 or more stores in each of those territories.
  17. ^ Parker, Penny (March 2, 1998). "Investors Are Pumping Big Bucks Into Big Burritos: Major investment groups make sure Z-Teca gets lots of Z capital". Denver Post. pp. C-01. Now it's Chipotle competitor Z-Teca Mexican Grill's turn. Denver's slightly smaller burrito chain, with 12 restaurants, has attracted two major investment groups infusing enough capital into the business for it to open 25 new company-owned stores by the end of the year. Western Growth Capital LLC, a private firm in Denver, specializes in investing in emerging companies in the Rocky Mountain region, said Don Anderson, one of five partners in Western Growth. The other new Z-Teca investors are three heavyweights in the fast-food industry. They are: Martin Hart, a board member for Papa John's America, the pizza franchise company; Jack Laughery, former CEO of Hardee's; and Dan Carney, the founder of Pizza Hut.
  18. ^ a b c "Z-TECA Restaurant Corporation Names CEO". PR Newswire (Press release). December 13, 1999. p. 1 – via The Free Library.
  19. ^ "People on The Move". Denver Post. November 23, 1998. pp. E-05. Z-Teca Restaurant Corp. named Gary Beisler president and chief operating officer.
  20. ^ a b Ruggless, Ron (July 27, 1998). "Z-Teca plans expansion of fresh-made burrito concept". Nation's Restaurant News. Vol. 32, no. 30. p. 76. Archived from the original on November 2, 2014 – via Highbeam Research.
  21. ^ Bunn, Dina (July 28, 1998). "Z-teca Chain Plans Design Make-over 'this Is . . . From Simple Logo to Something More Sophisticated.' - Founder Tony Miller". Rocky Mountain News (Final ed.). p. 4B. Z-Teca has grown with the help of franchising. Ten of the 21 are franchises. Of the 40 expected to open this year around the country, 26 will be franchises.
  22. ^ "Z-Teca changes name". Denver Business Journal. December 17, 1999.
  23. ^ Eagles, Cynthia (January 14, 2002). "Qdoba has recipe for success". Louisville Business First.
  24. ^ Berta, Dina (December 15, 1999). "Z-teca Changing to Q-doba Restaurant Chain's Name Was Too Similar to Those Of Longer-lived Eateries". Rocky Mountain News (Final ed.). p. 1B. Z-Teca Restaurant Corp. will change its name and the signs on all of its 49 restaurants next month to a word that has no meaning. Q-Doba is a made-up name to amuse customers while keeping the chain of Mexican grill restaurants out of court. Z-Teca lost a federal trademark infringement case this summer in Spokane, Wash., to Azteca, a Seattle-based restaurant chain. The Azteca name was registered 10 years before 5-year-old Z-Teca registered its trademark. Z-Teca was forced to take its name down from its two Spokane restaurants, which now operate under the No Name Mexican Grill moniker. Z-Teca also was threatened with another lawsuit by Z'Tejas Grill, a seven-unit restaurant chain based in Scottsdale, Ariz... Z'Tejas' name was registered 12 years before Z-Teca... This is not the first time Z-Teca has changed its name. The first store, which opened near Grant Avenue and Speer Boulevard, was originally named Zuma. Zuma was the name of a cat that belonged to a roommate of the restaurant's co-founder, Tony Miller. But shortly after opening, they discovered there was a Zuma restaurant on the East Coast. The owner was not interested in selling the name... Q-Doba means whatever we want, Beisler said. It's an empty vessel we can fill up with whatever we want.
  25. ^ "Qdoba opening eight Ohio restaurants". Denver Business Journal. March 28, 2003.
  26. ^ "ACI Capital - Portfolio". ACI Capital. Archived from the original on August 8, 2009. Retrieved July 30, 2009.
  27. ^ Robinson-Jacobs, Karen (January 22, 2003). "Jack in the Box Buys Qdoba Restaurant". Los Angeles Times.
  28. ^ "Qdoba restaurant chain sold to Jack in the Box". Louisville Business First. January 22, 2003.
  29. ^ Coomes, Steve (June 19, 2012). "Louisville-area Qdoba franchisees sell Ky., Ind., Tenn. stores to parent company". Insider Louisville.
  30. ^ a b Hicks, L. Wayne (March 8, 2013). "Qdoba picks Tim Casey as new president". Denver Business Journal.
  31. ^ "Qdoba President and CEO Gary Beisler Retires". QSR Magazine. October 11, 2012.
  32. ^ "Timothy Casey Named New President at Qdoba Mexican Grill". Business Wire (Press release). March 8, 2013.
  33. ^ "Keith Guilbault Named New Brand President at Qdoba Mexican Eats®". Business Wire (Press release). May 11, 2016.
  34. ^ York, Emily Bryson (June 27, 2013). "Qdoba to close 18 Chicago-area restaurants". Chicago Tribune. Retrieved June 29, 2013.
  35. ^ a b Yagalla, Mark (December 1, 2013). "Jack in the Box and Qdoba Look Set to Take Down Chipotle". The Motley Fool.
  36. ^ Sealover, Ed (October 13, 2014). "Qdoba's subtle makeover: A pricing change designed to combat negative customer perception". Denver Business Journal.
  37. ^ "Qdoba Frees the Flavor; "Extras" No Longer Cost Extra". MarketWatch (Press release). October 3, 2014.
  38. ^ "Comments to "Colorado friends - join us downtown at 17th & Welton and you can get some of your nickels & dimes back! We'll be hanging out..."". Facebook. October 3, 2014.
  39. ^ "Comments to "Price changes? I noticed that ur prices... - Shelly Ferguson Lindegren"". Facebook. November 5, 2014. Archived from the original on February 26, 2022.
  40. ^ Curtis, Nathan (November 6, 2014). "PILE IT ON! Qdoba Goes Toppings Wild...but at a Price". GutCheck.
  41. ^ a b DiPierro, Amy (June 3, 2016). "Qdoba chain is closing Lakewood headquarters, moving to San Diego". BusinessDen.
  42. ^ Cleveland, Claire (June 3, 2016). "Qdoba pulls up longtime stakes, moves HQ to San Diego: Mexican food chain opens 80th Colorado restaurant in Lakewood as it prepares to leave home in Belmar". Denver Post.
  43. ^ a b Weisberg, Lori (July 18, 2016). "Qdoba fast casual brand moving to San Diego". San Diego Union-Tribune.
  44. ^ Jennings, Lisa (October 27, 2015). "Qdoba Mexican Grill is now Qdoba Mexican Eats". Nation's Restaurant News. Retrieved December 27, 2015.
  45. ^ Horovitz, Bruce (November 2015). "Name Change Can Be a Game Change: Why some growing limited-service restaurants are opting to tweak their moniker". QSR Magazine.
  46. ^ Bomey, Nathan (December 19, 2017). "Jack in the Box sells struggling Qdoba for $305 million". USA Today. Retrieved December 19, 2017.
  47. ^ "Jack in the Box Completes Sale of Qdoba to Apollo Global Management". QSR Magazine. March 21, 2018.
  48. ^ Jennewein, Chris (May 14, 2018). "QDOBA Mexican Eats Names CEO, Announces Plans to Hire 100". Times of San Diego.
  49. ^ Concepcion, Mariel (June 5, 2019). "Qdoba Officially Moves into Amp&rsand Office Building". San Diego Business Journal.
  50. ^ "Qdoba promotes vice president Eric Williams to chief operating officer". Nation's Restaurant News. August 24, 2021. Retrieved May 2, 2022.
  51. ^ "All QDOBA Locations | Mexican Restaurants & Catering". locations.qdoba.com. Retrieved May 2, 2022.
  52. ^ Qdoba Plans Rapid Expansion
  53. ^ McNeill, Murray (December 5, 2012). "Brandon lands first Qdoba". Winnipeg Free Press.
  54. ^ "Qdoba restaurant opens in London". London Community News. March 18, 2013.
  55. ^ "Mexican Grill Polo Park Now Open". Access Winnipeg. April 25, 2014.
  56. ^ Sebert, Paul (March 11, 2010). "GOOD EATS: San Francisco style hits Huntington with Qdoba". The Herald-Dispatch.
  57. ^ Bass, Rachel (November 5, 2014). "Qdoba caters to campus' Mexican crave". Daily Illini. Archived from the original on February 2, 2015. Retrieved November 9, 2014.
  58. ^ Hendee, Caitlin (September 8, 2014). "CU Denver unbolts door on $60.5 million Auraria building (Slideshow)". Denver Business Journal.
  59. ^ Ferraresi, Michael (May 6, 2014). "New eateries coming to Student Union". GCU Today. Grand Canyon University News Bureau.
  60. ^ Hammett, Conner (February 16, 2018). "Qdoba Officially Opens at Fort Meade Exchange Food Court". Army & Air Force Exchange Service.
  61. ^ Jarman, Max (January 5, 2010). "Fresh-Mex restaurants expand outlets in Valley". Arizona Republic. Retrieved January 5, 2010.
  62. ^ "White City v. PR Restaurants, No, No. 2006196313 | Casetext Search + Citator". casetext.com. Retrieved May 2, 2022.
  63. ^ Abelson, Jeff (November 10, 2006). "Arguments spread thick". Boston Globe. Retrieved July 30, 2009.
  64. ^ "Rare typhoid fever spread at Qdoba restaurant in Colorado". CBS News. November 3, 2015.
  65. ^ McGhee, Tom (November 2, 2015). "Three infected with typhoid at Qdoba in Firestone in August". Denver Post.
  66. ^ "Qdoba Violated Mass. Child Labor Laws Thousands of Times". Boston Magazine. August 15, 2019. Retrieved May 3, 2022.
  67. ^ Stroud, John (January 3, 2020). "Four hospitalized briefly after food mishap at Glenwood Qdoba on Thursday". www.postindependent.com. Retrieved May 3, 2022.
  68. ^ "Chemical in food sends 4 at Colorado Qdoba to hospital". KUSA.com. January 4, 2020. Retrieved May 3, 2022.
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