Qdoba has a new influx of capital, in part from a former parent.
The fast-casual chain’s private-equity owner Butterfly Equity on Tuesday announced the closing of a $527 million single-asset continuation fund to extend the partnership and move the chain into a next phase of growth.
The fundraise was led by asset management firm Apollo’s Sponsor and Secondary Solutions (S3) business, and the company said it was oversubscribed. Qdoba was owned by Apollo before Butterfly acquired the San Diego-based chain in 2022.
Other new and existing investors joined in, including Painswick Capital, a specialist single-asset continuation vehicle firm created in 2024 by John Garcia, chair and former CEO of AEA Investors. The deal provides “an attractive liquidity option” for existing investors and strengthens the capital structure, Butterfly said.
Adam Waglay, co-founder and co-CEO of Butterfly, said in a statement, “We are proud of the success that Qdoba has achieved since our original investment, but we are even more thrilled to double down on our partnership with John and his incredible team as they embark on this next stage of growth. Mexican fast casual remains one of the highest-growth and most attractive categories within the broader restaurant sector, and we are excited to continue backing the category-leading franchisor for years to come.”
Butterfly’s 2022 acquisition of Qdoba included sister brands Modern Market Eatery and Lemonade, both of which were later sold to make Qdoba a standalone concept.
The private-equity firm brought in John Cywinski, the former president of Applebee’s, as CEO of Qdoba in 2023. Cywinski once said the fast-casual chain had been “orphaned” under Apollo, saying, “We were a fly on an elephant’s ass.”
After some pruning of the legacy system, Cywinski launched a revitalization plan that included new digital menu boards, a new app, website and loyalty program, remodels, refreshed marketing, and an aggressive push into a “franchise-first” model, embracing Qdoba’s role as the second leading Mexican fast-casual after Chipotle. But, unlike Chipotle, Qdoba franchises.
The chain has more than 800 units, moving recently into Canada and Puerto Rico. Qdoba ended 2024 with more than $1.2 billion in sales, up more than 10%, according to Technomic’s Top 500 Restaurant Chain list.
In January, Cywinski said Qdoba’s systemwide same-store sales increased 7.7% in 2024, with more than 4% of that from traffic.
The San Diego-based chain is also accelerating growth. This year, Qdoba planned to net about 56 new restaurants, and next year that number will grow to 75. By 2027, Cywinski said Qdoba will pass the 1,000-unit mark, of which roughly 80% will be franchised.
“Qdoba is the best-kept secret in the restaurant industry. With mid-single digit comp sales in each of the past three years and projected 10% annual new unit growth, Qdoba is now one of the fastest growing national restaurant brands in America,” said Cywinski in a statement. “Given this trajectory, we expect to double Qdoba’s system sales over the next five years, and I honestly can’t think of a better partner than Butterfly to help us unlock our full potential.”
Evercore served as exclusive financial advisor to Butterfly, Kirkland & Ellis served as legal counsel to Butterfly and Weil Gotshal served as legal advisor to Apollo S3.
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