Toronto-based BarBurrito, which will go by BurritoBar in the U.S. to avoid a potential trademark infringement with a similarly named restaurant, has 268 locations in Canada and three in U.S.
BarBurrito Chief Development Officer Jeff Young calls his company’s ambitious United States expansion plans “more of a marathon than a sprint.”
The popular Canada-based Tex-Mex brand wants to maintain a gradual and steady pace for getting new restaurants up and running, said Young. Sister brand BurritoBar has a handful of franchise development agreements signed to open over 500 locations in the U.S over the next 20 years. To date, the company signed master agreements for the states of Michigan, Florida, Tennessee, Iowa, Nebraska along with northern Texas.
Related: Canadian Tex-Mex Brand BurritoBar Continues U.S. Expansion With Iowa Deal
The company signed a pair of master agreements with Surinder Sandhu, a longtime Subway operator, to open 149 BurritoBars in Virginia and Maryland over the next two decades.
“This is a long-term growth strategy we’re undertaking. Realistically, I’d like to see us open five to 10 new restaurants a year,” Young said about the company’s U.S. development efforts, “but it’s going to be based on the availability of quality real estate and so many other factors associated with that.”
BarBurrito, which renamed its U.S. operations BurritoBar USA to avoid potential trademark infringement, has four restaurants in the U.S. Three of them are in Michigan, with another restaurant in Delaware. Young said the brand signed leases in Hawaii and Tennessee, and anticipates openings there within the next six months.
The Toronto-based company has over 300 BarBurritos open in Canada and opened 65 new restaurants in its home country last year, Young said. BurritoBar’s development strategy in the U.S. is focused exclusively on signing master and area development agreements with experienced restauranteurs and hospitality operators, he said.
The initial investment of a BurritoBar master franchise location ranges from $128,750 to $1,119,000, according to the company’s franchise disclosure document. This includes the $75,000 to $1 million franchisee fee. Its Item 19 does not report average unit volume.
Related: With New Master Deals, Canada’s BarBurrito Makes Big Push in U.S. Markets
Sandhu, the owner of Sandhu Restaurant Group of Virginia and Sandhu Restaurant Group of Maryland, fits the profile of the franchisor’s ideal developer. He has been a Subway operator for over 25 years and still owns seven Subways in Maryland. At one point, his group owned nearly 30 Subways before either closing or selling its under-performing units.
Surinder Sandhu signed a pair of master franchise agreements to develop 149 BurritoBars in Virginia and Maryland.
“I’ve been a franchisee for a long time and I always wanted to get into development. When I found out about BurritoBar and realized that there are not much decent Mexican restaurants in my market, it was an easy decision for me to make to go with the brand,” said Sandhu.
“The challenge for me is going to finding good real estate locations. The company is helping me find those now,” said Sandhu.
Young and BarBurrito founder and CEO Alex Shtein spend much of their time traveling throughout the U.S. markets where the company has agreements signed. They are arranging meetings with local real estate brokers who can best assist them “to identify, negotiate and secure high quality” locations.
“Once we assign a broker, we develop a list of potential sites and then we come back and visit the sites with our developers and then help them with lease negotiation,” Young said. “It’s a collaborative approach and process we take very serious because we want to make sure we make the best decisions on the locations of our restaurants.”
Jeff Young is chief development officer for BarBurrito and BurritoBar.
He said the typical BurritoBar is 1,000 to 1,500 square feet and the ideal location is in or near popular shopping centers.
“We’re a little different from some brands in that we’d rather focus on those suburban residential communities in secondary and peripheral markets before we look at downtown urban settings,” Young said.
“The key to developing a territory or a state,” Young said, “whether it be 50 or 75 or 100 or 200 stores, is opening up one successful store at a time, and that’s our plan.”