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Tampa wrapped in burritos

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By RICHARD MULLINS

rmullins@tampatrib.com

Published: November 12, 2009

TAMPA - Tampa's franchise burrito business is getting stuffed like a bulging tortilla.

Into the void left by sit-down joints that went belly up, the fast-made burrito is beginning to reign. Already, Tampa has four Chipotles, roughly eight Tijuana Flats, a half-dozen Moe's Southwest Grills, not to mention a few dozen Taco Bells. That doesn't count any local burrito joints, of which there are many.

Now add three more Qdoba Mexican Grill locations opened recently, and six more in the next year or so.

"A lot of people are taxed for time and money lately, and this concept gives them something fresh, engaging and quick," said Wade Gosnell, a Qdoba franchisee opening up Qdoba locations across Florida. ("Qdoba" is a made-up word with no actual meaning in Spanish; pronounced "cue-DOH-bah.")

Even among the relatively healthy fast-casual restaurant segment, Mexican concepts grew better than most, with 11.9 percent expansion last year, according to food service consultant Technomic.

Unlike the past incarnations of sit-down Mexican food such as Chi-Chi's or Don Pablo's, these fast Mexican burrito spots focus on speed, a low price and a few standard items that customers can modify to their whims.

Similar to Chipotle, Qdoba tend to locate in high-traffic intersections. Customers walk in a line past cooks who prepare burritos, tacos or quesadillas in a flow toward the cash register, and customers fill their own drinks at a fountain stand near the seating area.

For the most part, a burrito lunch can cost less than $8 with a drink, maybe a couple of dollars more for an order of chips and guacamole. But it's the very nature of Mexican food that seems to work well in the fast casual world long dominated by Panera Bread and others.

Typical burrito ingredients can be made fresh on-site but several hours in advance without going stale: Rice, beans, cheese, salsa, plus marinated and grilled meats. "There's a lot of opportunity there because the customer can add any of four extra flavors and it's endless," Gosnell said. Customers can watch chefs at work, giving them some interaction and flexibility not found in sit-down restaurants, he said.

That made-on-site yet efficient formula has worked well in this economy, said Scott Gilkey, a Seattle-based consultant on restaurant startups. As long as a location keeps menu items simple and under $10 per order, a typical fast-casual restaurant can easily generate profits of 15 to 20 percent, he said, returning a profit to investors within three to five years.

"I think fast-casual Mexican has a lot of room to grow," Gilkey said. "I see concepts like that ultimately competing with giants like Subway, which has 5,000-plus locations now."
Gosnell operates about 50 Papa John's locations in Florida and could ultimately operate more than 20 Qdobas in the state, he said. In the Tampa Bay area, the Qdoba concept is relatively new. It started in Denver in 1995, then grew dramatically after 2003 when San Diego-based Jack in the Box Inc. acquired the concept, expanding its ranks to more than 500 U.S. locations.

Rival Chipotle operates more than 800 locations and has done well on the stock market this year. After hitting a relative low of less than $40 per share in November 2008, Chipotle stock is up to $90 this week. The company was able to raise prices on some items during this year, citing strong demand.

The stock of Qdoba parent Jack in the Box has been more volatile, ranging from about $28 per share to $17 this year. It was around $19 this week.

Total Qdoba sales grew from $88.2 million in the 40 weeks ended July 6, 2008, to $107.2 million in the 40 weeks ended July 5, 2009, as the company opened more locations. Sales at existing Qdoba locations decreased 2 percent year-to-date, the company said in corporate filings, "as the macroeconomic environment continued to affect consumer spending at restaurants with higher check averages."

In the meantime, Tampa burrito fans can expect a wave of Qdoba marketing across the city in the next year. The chain plans a push of radio, billboard and print advertising, Gosnell said, plus a social media campaign, in part about how to pronounce "Qdoba."

Reporter Richard Mullins can be reached at (813) 259-7919.

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