facebook pixal
Financing

Jack in the Box's largest franchisee agrees to buy Taco Cabana for $85M

The sale by Fiesta Restaurant Group will enable the company to focus on Pollo Tropical, according to its CEO.
Photograph: Shutterstock

The parent company of Taco Cabana on Thursday said that it has agreed to sell the 148-unit Tex-Mex chain to the largest franchisee of Jack in the Box and TGI Friday’s for $85 million.

The seller, Fiesta Restaurant Group, said it will use the proceeds from the sale to Yadav Enterprises to pay off $79.2 million in loans and related fees.

The deal, which is expected to close during the third quarter, would leave Fiesta with a single brand, Pollo Tropical. The transaction will enable “us to create a more effective, efficient and focused organization, applying appropriate resources to accelerate delivery of the exciting growth potential we have in our Pollo Tropical brand,” Richard Stockinger, Fiesta’s CEO, said in a statement.  

For Yadav Enterprises, the deal will add another brand and 142 restaurants to its current holdings of about 400 restaurants. It will also deepen the company’s role as a franchisor; six Taco Cabana units are franchised.

The company is currently an investor in the parent company of TGI Friday’s as well as the largest franchisee of that system.

In addition to operating units of Jack in the Box and Friday’s, Yadav is also a franchisee of Denny’s, Corner Bakery and El Pollo Loco. Its restaurants are located across 18 states, with a concentration in Texas and northern California.

“Anil Yadav, the CEO of Yadav Enterprises, has an impressive entrepreneurial background and is a highly-respected restaurant operator with a proven record of success across a variety of limited and full-service concepts,” Stockinger said in the prepared statement. “We are confident he will be an effective steward of the Taco Cabana brand for the long-term.”

The deal is the latest in a flurry of brand purchases by franchise operators. Earlier this month, Luby’s sold rights to the Fuddruckers brand to Nicholas Perkins, a franchisee, and Panera Bread agreed to sell Au Bon Pain to Ampex Brands, a franchisee of Yum Brands and 7-Eleven.

Taco Cabana itself has struggled in recent years. System sales declined almost 20% last year, according to Restaurant Business sister company Technomic. They have declined 25% over the past five years and the chain has closed 11% of its restaurants over that period. 

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Want breaking news at your fingertips?

Get today’s need-to-know restaurant industry intelligence. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand.

Trending

More from our partners