What is it about Mexican cuisine, and tacos especially, that prompts more and more brands to enter the U.S., with consistently more and more expansion on the horizon nationwide? Taco establishments garner so much customer interest because the food is generally at a cheaper price point, can usually be accessed via drive-thru/carry-out options and has an association with celebratory fun such as “Taco Tuesday” hashtags, margarita happy hours and Cinco de Mayo festivities.
Many of the taco shops trending with growth offer unique and healthy menu items, such as vegetarian and fish options. These taco brands cater to all demographics and are found in all types of real estate spaces, such as grocery-anchored power centers, strip malls, ground-floor retail of mixed-use spaces and street-front retail. Look for Roll-Em-Up Taquitos, Taco John’s, Fuzzy’s Taco Shop, Rusty Taco, Torchy’s Tacos and Tacombi to all be searching for new real estate sites nationwide.
Roll-Em-Up Taquitos, a Mexican restaurant brand founded in 2019 that is solely focused on the easier-to-eat rolled-up taco, anticipates opening between 50 and 75 new units per year over the next two years, with a plan to eventually raise that amount to opening at least 100 new units per year until 2026. Already, Roll-Em-Up Taquitos has 420 franchise locations sold, with franchisee partners David Weaver and Blake Terry agreeing to open 315 units sprinkled throughout both Texas and Oklahoma. The Aurora Group signed on to open at least 50 units in California, and franchisees Robert Barsky and Igor L. Barsky also enlisted to open up to 50 units in Colorado. Additional franchisee and corporate growth will take place in Las Vegas and the Phoenix area. Roll-Em-Up Taquitos is also eyeing new expansion opportunities in Oregon, Idaho, Utah, Arkansas, Kansas, Virginia and Missouri, hoping to reach its goal of having 500 franchise locations signed by the end of this year.
The taquitos brand looks for end cap or drive-thru units, including on standalone pads of strip malls or power centers, in the 1,600- to 2,000-s.f. range, off major thoroughfare highways and high-traffic streets. Ideal co-tenants include non-competitive dining brands, such as Subway or Starbucks. All markets are considered, especially urban and suburban sites with high walkability traffic. Roll-Em-Up Taquitos serves up five different variations of its taquitos, filled with either shredded chicken, shredded beef, potatoes, cheese or avocado. Toppings include choices such as cheese, guacamole, sour cream and homemade dipping sauces.
Taco John’s is gearing up for major expansion, anticipating 75 to 80 new units per year over the next three to five years. Growth in the immediate future is centered on West Michigan, thanks to a development agreement with Meritage Hospitality Group, which will begin expanding the brand in the state. Meritage, which is also a franchise operator for Wendy’s, will open 50 new units over the next five years, with the option of opening an additional 150 restaurants. Meritage will likely expand Taco John’s into other states where it already has successful Wendy’s restaurants in place, including more rural to suburban areas within Arkansas, Connecticut, Mississippi, Oklahoma, Florida, Virginia, Texas and the Carolinas. Growth will also take place in the greater Milwaukee region, due to Pentex Restaurant Group agreeing to open up to 12 new units in that area over the next four years.
Taco John’s seeks high-traffic conversion units that are between 1,900 and 2,100 s.f. at busy intersections in millennial-friendly rural to suburban neighborhoods and college towns. Sites must have a drive thru. Space can be end caps in power centers or strip malls, or standalone buildings and should provide at least 25 parking spots and seating accommodation for 50 people. Ideal co-tenants include big-box brands such as The Home Depot and Walmart, and eateries such as Five Guys. Taco John’s is famous for its healthier dining options, such as its tortilla-less bowls, as well as its value menu, which includes a chicken bacon guacamole street taco.
Fuzzy’s Taco Shop, owned and managed by NRD Capital, expects to grow at a rate of 30 new units per year over the next five years nationwide. The brand recently finalized a 50-store franchise agreement with Richard Maddox, a Slim Chickens franchisee, for growth in the Southeast in which all of the units will feature a drive thru, a first for Fuzzy’s. The brand did debut a drive-up window in Wylie, Texas, in October 2021, but it was for delivery service/online orders only. In this same franchise deal, three new states will get their first Fuzzy restaurants this year: Tennessee, North Carolina and Alabama. Florida, South Carolina and Georgia will also see additional units through this same franchise deal. Montana will see at least five units in a franchise deal with Johnson Restaurant Group, which is also overseeing continued growth in Wyoming, a state that opened its first Fuzzy’s last summer. Its restaurants usually average 3,500 s.f. and are found in inline or end-cap strip malls or power centers with patio spaces in suburban or college town markets, near stores such as HomeGoods or Dick’s Sporting Goods.
Last year Fuzzy’s debuted its first “Fuzzy’s Taco Shop Taqueria” in a 1,100-s.f. ground-floor unit of a mixed-use Class B office building in Minneapolis. The prototype is a way for Fuzzy’s to accommodate smaller spaces in densely populated urban areas, a new market for the brand. Although the smaller space has a limited menu and focuses on to-go/delivery orders, there is still room for a 15-foot indoor bar with seven barstools for patrons to order alcoholic beverages. Expect the brand to open up to three more of these Taqueria prototypes, in the 1,200- to 1,800-s.f. range, in more urban environments in the future. Fuzzy’s Taco Shop is a colorful, lively restaurant that serves Baja California favorites such as mahi tacos, tempura or grilled shrimp tacos and even a shredded beef brisket taco, in addition to burritos, nachos, salads and bowls.
Rusty Taco has a goal of opening 10 units per year until early 2024, when it expects to ramp up its growth to 40 to 50 new units per year. Look for Norfolk and Richmond, Va., Salt Lake City, Reno, Nev., and West Texas to see immediate growth, thanks to recent multi-unit franchise agreements that have been signed. Beyond that, expect continued growth throughout Iowa, Kansas and in the Southern states of Florida, Georgia and the Carolinas. Managed by Inspire Brands since late 2018, Rusty Taco is especially focused on national expansion, and real estate reps for all 50 states are now in place. Rusty Taco seeks space in the 2,600- to 3,000-s.f. range in all types of real estate, including end caps in strip malls, neighborhood grocery-anchored power centers or urban storefronts, or space in existing freestanding buildings. Space must have a patio section. Preferred markets should have a median income of at least $50K/year. Ideal co-tenants include other non-competing fast-casual dining establishments, such as Panera Bread. Rusty Taco, which also sells alcoholic drinks, is known for its huge selection of more than 20 different street tacos that are offered at a lower price point.
Torchy’s Tacos is expected to open approximately 30 new units per year over the next two years. Look for the brand to especially be pushing into two new states for immediate growth: Arizona and Florida. Phoenix, Gilbert, Ariz., and Orlando, Fla., will be targeted for immediate expansion, followed by continued growth through both states. Expect Torchy’s to also eye new markets such as Kansas City, Mo., Wichita, Kan., Nashville, Tenn., Indianapolis, Salt Lake City and Las Vegas in 2023 and beyond. Torchy’s seeks end caps in regional shopping centers and strip malls in the 3,000- to 4,000-s.f. range, especially near colleges in urban and suburban markets. Within a three-mile radius, the site should have an average household income of $100K. Torchy’s is famous for its unusual taco fusion ingredients featuring unique fillers such as Jamaican jerk chicken, blackened salmon or ahi tuna with wasabi sour cream, grilled shrimp with bacon, BBQ sauce and pineapple and beef brisket.
Tacombi is garnering major buzz because of a $27.5M capital investment in December, primarily led by Enlightened Hospitality Investments, overseen by the founder of Shake Shack. The funds will be used to ramp up expansion to 10 to 15 new units per year until 2027, especially along the East Coast. Look for areas within New Jersey, Westport, Conn., South Florida, Washington, D.C., Chicago and Long Island, N.Y., to be targeted for immediate growth. Tacombi is especially interested in inline, end cap or standalone buildings between 2,500 and 3,000 s.f. Sites should be in urban or upscale-suburban metro retail street fronts, and ground-floor units of Class A mixed-use office or apartment buildings, especially new construction projects. Ideal co-tenants include mid- to higher end brands that attract upper middle-class consumers, such as Amazon Fresh or Pottery Barn or other restaurant/bar concepts. Tacombi, which also serves alcoholic drinks, is recognized for its traditional Mexican tacos with seven different fillers, such as seared fish, carnitas, carne asada and black beans with sweet potatoes, as well as its burritos and quesadillas. There is also brand recognition at select Whole Foods Market stores that sell Tacombi’s own “Vista Hermosa” brand of tortillas and tortilla chips.
