The restaurant investors behind the success of Dave’s Hot Chicken are making a brand new nationwide bet on the next-hottest restaurant development: birria.
Mike’s Purple Tacos, a San Diego-based birria chain with simply two areas, plans to announce on Tuesday a brand new franchising initiative that can construct tons of of eating places throughout the U.S., with help from early-stage backers Invoice Phelps and Andrew Feghali, CNBC can report.
Monetary phrases of their funding, which befell in early 2025, weren’t disclosed.
“We simply noticed that this was a model and an idea that basically had legs to it,” Phelps informed CNBC. “After which the essential factor is, we introduced down potential franchisees. … Everybody gave it the thumbs up.”
Phelps stated he had by no means heard of birria earlier than Feghali launched him to Mike’s.
Conventional birria is a beef or goat stew, sluggish cooked with spices and chiles to provide the meat plenty of taste. Birria tacos, like these bought at Mike’s, use the slow-cooked meat as a filling and often embrace a consomme on the facet as a dip for the taco.
As soon as generally known as a regional Mexican meals, birria now seems on 3.7% of U.S. menus, in accordance with Datassential. That is greater than quadruple its menu penetration 4 years in the past, primarily based on the agency’s knowledge, however there’s nonetheless a protracted runway earlier than it reaches ubiquity.
Mexican-inspired fast-food manufacturers corresponding to Qdoba, El Pollo Loco, Del Taco and even Taco Bell have launched their very own variations of birria. And there is at the least 478 restaurant operators operating birria-focused eating places, in accordance with Datassential.
Mike’s menu additionally consists of burritos, loaded nachos and fries, and birria ramen.
“It appeals to a really broad vary of company — it isn’t simply your millennials and Gen Zs,” Phelps stated, talking in regards to the clients in Mike’s Purple Tacos eating places. “There’s older folks within the restaurant, there’s little youngsters, so it is received a really, very broad enchantment.”
Phelps co-founded Wetzel’s Pretzels in 1994 and have become a founding investor in Blaze Pizza, the fast-casual pizza chain based by Elise and Rick Wetzel. In 2019, Phelps joined Dave’s Hot Chicken as an investor and CEO, utilizing franchising to increase the chain rapidly to tons of of eating places worldwide. Final yr, personal fairness agency Roark Capital purchased a majority stake in Dave’s Hot Chicken in deal value roughly $1 billion.
Feghali was one of many first franchisees of Dave’s Hot Chicken. He’s additionally one of many nation’s largest Little Caesars operators.
Collectively, Feghali and Phelps based 4 Wall Companions, a restaurant franchising funding agency. Along with being early-stage investors in Mike’s, they are going to act as advisors and members of the chain’s board.
Vincent Montanelli, who most just lately served as chief govt of Wetzel’s, has joined Mike’s to function president.
Based initially as a meals truck 5 years in the past, Mike’s Purple Tacos opened its first brick-and-mortar location in 2022. Founder Mike Touma plans to open his third location in March; he’ll keep on with the corporate as a board member and franchisee of the chain’s San Diego areas.
“We put collectively a deal the place [Touma is] going to maintain the rights to his shops and future shops in San Diego, after which we will franchise it throughout the remainder of the U.S. and internationally,” Phelps stated.
The brand new staff plans to comply with the established playbook utilized by Wetzel’s and Dave’s to develop Mike’s Purple Tacos rapidly.
“We will be very aggressive the place we develop with this, as a result of we have seen that we will do this,” Phelps stated.
The taco chain has already secured franchising growth offers with multi-unit operators for greater than 200 areas nationwide, from California to Texas to New England. A few of these franchised eating places might open as quickly as the top of the yr.
Phelps anticipates stiff competitors from national chains and native taco eating places alike. Nevertheless, he stated he thinks that the chain’s easy menu, scrumptious meals and an aggressive advertising and marketing technique may help Mike’s overtake rivals.
“We expect this generally is a winner,” Phelps stated.
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