
In the Mexican fast-casual world, 2024 was a rough year for some taco-focused brands.
The fast-casual Mexican category has long been dominated by players like Chipotle and Qdoba. Those brands offer tacos, of course, but are known more for burritos and bowls. In recent years, more taco-focused concepts had begun to show promise as an alternative offering something a bit different.
Last year, however, two fast-casual Mexican chains—both known for their taco-centric menus—filed bankruptcy.
First came Tijuana Flats, which filed for Chapter 11 in April, shuttering about 40 restaurants. Then Rubio’s—once known for its Baja-style fish tacos— filed in June, after closing 48 units, shrinking to 83 locations.
Both emerged from bankruptcy with new owners. Rubio’s was picked up by TREW Capital Management, an investment firm led by former Famous Dave’s CEO Jeff Crivello. Systemwide sales, however, were down more than 23% to $169 million, according to Technomic Top 500 data, which is not surprising, given the nearly 44% reduction in unit count.
And the now nearly 100-unit Tijuana Flats was acquired in a debt-for-equity exchange by investment firm LS Capital, which operates as Flatheads LLC, who brought in turnaround specialist James Greco as CEO. He faced an 18% decline in sales last year, also likely tied to closures.
In January, Greco said the Orlando-based chain had brought in a family-owned food business from Mexico City to bring more authentic flavors to the menu, starting with a line of Street Tacos.
It was also not a good year for Fuzzy’s Taco Shop, a California-style-but-Texas-born taco brand acquired by Applebee’s and IHOP parent Dine Brands in 2022.
Fuzzy’s sales dropped nearly 15% in 2024 to $185 million, and units shrunk by 11% to 117. And Dine Brands said traffic continued to be a challenge for Fuzzy’s in the first quarter, despite the launch of several initiatives to boost business.
Fuzzy’s launched its first systemwide happy hour, for example, with the goal of expanding its bar business. The online ordering website was revamped and the company worked with a third-party delivery partner to increase market visibility. And new wireless and mobile payment systems are being installed at all units.
Dine Brands CEO John Peyton said the company is looking at pairing Fuzzy’s units with IHOP. A franchisee in California recently opened the first side-by-side Fuzzy’s and IHOP location. The menus are distinct—Fuzzy’s does about 10% of sales at breakfast, so there’s some overlap and the units operate with separate menus. But there are common back-of-house elements and restrooms, which reduces costs for franchisees.
But not all taco-focused brands did poorly. In fact, two growing brands known for taco innovation had standout results in 2024.
Dallas-based Velvet Taco was the top performer in the Mexican fast-casual category last year in sales growth, with a 21.6% increase to more than $147 million. That was largely because of a nearly 20% increase in unit count to 49, but it wasn’t only about store growth.
CEO Clay Dover said the chain has also benefitted from making creative use of its loyalty database of about 1 million users. In partnership with Thanx, Velvet Taco has been able to deliver more targeted messaging that has helped drive traffic.
“It’s got all the bells and whistles, like the Death Star that’s fully operational,” said Dover. “If a guest has never been there at dinner, for example, we can do messaging and say, ‘Hey, you love us at lunch, so come try us at dinner.’”
Velvet Taco has long distinguished itself in fast casual as a brand offering global flavors in taco form, not just Mexican.
One of the best sellers, for example, is a Chicken Tikka Taco, and the Weekly Taco Feature (known as WTF) sometimes highlights wildly innovative offerings, like one with Hawaiian Huli Huli chicken tenders, pineapple and barbecue sauce, or Peruvian pork with crispy potatoes, and roasted chile aioli.
But this year, the deliberately taco-focused Velvet Taco took a bold step and began offering bowls for the first time.

Velvet Taco debuted new signature bowls for the first time this year. | Photo courtesy of Velvet Taco.
It wasn’t an easy decision, Dover said. But the bowls offer the same innovative flavors as the tacos, and consumers gave them permission to try it in a different vehicle.
“We did a lot of consumer research. We talked to guests,” said Dover. “People were telling us ‘We don’t want to eat with our hands, and I like that I can put a lid on it and take it home with leftovers.’ We got a positive reaction from females. There’s a health halo about putting it on a bed of greens.”
Velvet Taco, however, limits the menu to certain signature bowls (for a value-positioned $11.50 with guacamole), and guests can’t build their own, like at Chipotle.
Torchy’s Tacos is another brand that has become known for not sticking to the script when it comes to tacos. The chain’s “damn good” taco lineup includes weekly specials that might include teriyaki green chile pork with crispy wontons and sweet-and-sour slaw, or Jamaican jerk chicken with grilled jalapenos and mango.
Sales for the chain grew 10% last year to more than $530 million, with units up 6.5% to 131, moving into new markets like Atlanta, Nashville and the Washington, D.C. area. Over the past two years, Torchy's also snagged an NFL partnership as the official taco and queso of the Kansas City Chiefs.
Torchy’s also debuted new bowl offerings this year, which, like Velvet Taco, focus on signature curated bowls and not build-your-own options.
Chipotle, meanwhile, did just fine with its build-your-own model, despite social media complaints about portion sizes early in 2024. The Newport Beach, California-based brand grew sales nearly 15% last year, topping more than $11 billion.
It was a big year of change for Chipotle. Former CEO Brian Niccol moved to Starbucks and longtime operations chief Scott Boatwright stepped to the helm. The chain is rolling out a kitchen equipment modernization plan this year that officials say will be a gamechanger in the drive to improve throughput, and Boatwright is gung ho on international growth. Chipotle is franchising for the first time with Alshaya Group, which is bringing the brand to the Middle East.
But it was a challenging start to 2025 for Chipotle, which reported its first decline in same-store sales in five years after the first quarter. The downturn was blamed largely on consumer pullback, but outside data indicates the brand may have a value perception problem.
Happily in second place as the franchised alternative to Chipotle, Qdoba also had a strong 2024, with sales up more than 10% to $1.2 billion. Last year, Qdoba separated from sister brands Modern Market and Lemonade. San Diego-based Qdoba stayed with owner Butterfly Equity, which brought in John Cywinski as CEO in 2023, following a whole business securitization.
Cywinski has set a goal of surpassing 1,000 units by 2027, with about 80% franchised.
In March, Qdoba said it had passed 500 development commitments, including an acceleration of nontraditional units in airports, universities and military bases. Recent deals include a 15-unit commitment in the Northeast, for example, and a 10-unit deal in Ohio, and existing franchise operators are expanding their portfolios.
Earlier this year, Cywinski said the chain expects to net about 56 new restaurants in 2025.
In an interview in January, Cywinski said being one of two leading brands in Mexican fast casual is a position of strength.
“We don’t have to deal. We don’t have to discount. We have organic growth. We don’t have to steal one dollar of market share from Chipotle,” he said. “We can peacefully co-exist.”