Investment firm infuses Qdoba with $527 million dollars
Butterfly Equity Boosts Qdoba's Growth with $527 Million Fund
Butterfly Equity, a leading private equity firm, has closed a significant $527 million single-asset continuation fund for Qdoba, the popular Mexican fast-casual restaurant chain. This investment comes three years after Butterfly Equity acquired Qdoba from Apollo, marking a new phase in the chain's growth strategy.
The funds, led by Apollo's Sponsor and Secondary Solutions (S3) business, will be used to fuel store development, strengthen Qdoba's capital structure, and offer liquidity to existing investors. This move underscores the confidence in Qdoba's business model and growth outlook, aiming to help Qdoba double its system sales over the next five years.
Qdoba, currently one of the fastest growing national restaurant brands in America, operates over 800 locations and achieved approximately $1.3 billion in systemwide sales in 2023. The recent capital raise is expected to accelerate this growth, with over 500 restaurants reportedly in development.
Post-acquisition, Butterfly Equity has focused on a growth strategy centred on transitioning Qdoba to a franchise-first model, strengthening its leadership team, and accelerating development. This strategy has seen Qdoba expand into new regions such as the East Coast, Midwest, and Pacific Northwest, and even into Canada and Puerto Rico.
John Cywinski, the former president of Applebee's, was brought in as Qdoba's CEO by Butterfly Equity in 2023. Under his leadership, Qdoba ended 2024 with over $1.2 billion in sales, a 10% increase from the previous year. More than 4% of Qdoba's 2024 sales growth came from increased traffic.
In 2024, Qdoba's systemwide same-store sales increased by 7.7%. This growth was achieved despite Qdoba becoming a standalone concept after sister brands Modern Market Eatery and Lemonade were sold.
Adam Waglay, co-founder and co-CEO of Butterfly, is proud of Qdoba's success since their original investment. He states, "Qdoba was orphaned under Apollo's ownership, but under our management, it has flourished."
Other new and existing investors, including Painswick Capital, have also joined the fundraise, strengthening Qdoba's financial backing and ensuring its long-term growth. Evercore served as the exclusive financial advisor to Butterfly Equity in the fundraise.
With this significant investment, Qdoba is poised to continue its expansion and solidify its position in the competitive fast-casual market. The future looks bright for this growing restaurant chain.
The recent $527 million capital raise for Qdoba, led by Butterfly Equity and other investors, will be utilized to transition Qdoba to a franchise-first model, strengthen its financial structure, and accelerate its development in the real-estate sector. This move signifies the investors' faith in Qdoba's growth potential within the restaurant industry, aiming to double its system sales over the next five years.
Butterfly Equity has strategically focused on franchising since acquiring Qdoba in 2020, strengthening its leadership team, and expanding the chain's presence into new regions, including the East Coast, Midwest, and Pacific Northwest, as well as Canada and Puerto Rico.
Investments in Qdoba's growth strategy not only involve real-estate but also extend to business development, as Qdoba's systemwide same-store sales increased by 7.7% in 2024, despite becoming a standalone brand after sister brands were sold. This growth highlights Qdoba's strong financial position and promising outlook in the franchising environment.
