After nearly 50 years of building up a 140-unit presence in Texas, fast-casual concept Taco Cabana is looking beyond the borders of the Lone Star State for expansion.
To do so, the brand, founded in 1978, launched a franchise system with a goal of growing in nearby states, such as Arizona, Arkansas, Colorado and Missouri. The move comes a few years after Yadav Enterprises acquired Taco Cabana from Fiesta Restaurant Group for $85 million 2021.
The parent company is led by Anil Yadav, a multi-brand franchisee owning more than 340 restaurants, with Jack in the Box representing the majority. As a franchisor, in addition to Taco Cabana, Yadav Enterprises purchased Nick the Greek in 2022.
Related: Large Jack in Box Operator Yadav Enterprises Buys Nick the Greek Restaurant Chain
“After the Yadav Enterprises acquisition, we began building our franchise system,” said Ulyses Camacho, Taco Cabana president and chief operating officer. “We’re excited to launch the full-blown program because the time is right. We have a full structure in place now to support the franchise network.”
Ulyses Camacho is Taco Cabana’s president and chief operating officer.
In addition to guidance Yadav can provide, Taco Cabana’s team includes longtime franchising director John Ramsay, who previously led development efforts for brands such as Noodles & Company, Jack in the Box and Marco’s Pizza.
“We know that brand success and growth can be accelerated with franchisees and strategic partners,” Ramsay said. “So, we’re combining the existing growth strategy of the Taco Cabana brand with the understanding of what makes a good franchise system, such as the support network and back-of-house needs.”
Camacho said the initial stage of the system launch is to identify the right franchisees over the next six months. From there, Camacho said the goal is to have site selection and approval for some franchisees in the second half of 2025.
Ramsay said the search is on for potential owners who have local market knowledge with an established network of operations teams and access to capital.
“When I first got into this business, the ideal franchisee was somebody that had money and the next qualifier was restaurant experience,” Ramsay said. “We think there’s more to it than that, though. One is business ownership experience. It’s one thing to run a restaurant, it’s another to actually own and run an independent small business.”
Another qualifier is development experience, he said.
Geographically, Ramsay said the brand is looking at mid-sized markets for multi-unit development where franchisees can have exclusivity.
John Ramsay is the director of franchise sales and development for Taco Cabana.
“We’re focused on bringing in quality franchisees that can come into a market, sign a multi-unit deal and have a reasonable amount of time to build those locations,” Ramsay said. “We’re looking into states that are contiguous to Texas first, Arizona, Oklahoma, Colorado and Missouri. We want to be able to support those franchisees quickly and easily. We do have national distributor contacts set up, but ideally, we want to start closer to Texas and grow from there.”
As the brand moves into those markets, Camacho said Taco Cabana is betting on a few advantages to be competitive in the Mexican category, which includes giants like Taco Bell. The first is the brand providing breakfast options, which make up 30 percent of the business’ sales, Camacho said. The brand also has alcoholic drinks and every unit has a drive-thru.
“What we offer is quality, convenience and value,” Camacho said. “We have char grills in every one of our restaurants, so our customers can come through and get a fresh charred fajita right now, which not a lot of other brands are doing.”
The average footprint for a Taco Cabana is 2,500 square feet and franchisees have the option to add a 500 square-foot patio. The initial investment ranges from $1.2 million to $2.6 million.