In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Fuzzy’s Taco Shop franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Fuzzy’s Taco Shop franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Fuzzy’s Taco Shop’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average gross revenue for the 72 system-wide, 66 franchised, and 6 company-owned Fuzzy’s Taco Shop restaurants that were open and operating for the entire 52-week annual period beginning December 29, 2014 and ending December 27, 2015 (separately stated)
- 2015 average food cost, labor cost, and occupancy cost for the 6 company-owned Fuzzy’s Taco Shop restaurants that were open and operating for the entire 52-week annual period beginning December 29, 2014 and ending December 27, 2015
Section I – Background Information
The first Fuzzy’s Taco Shop location was opened in Fort Worth, Texas by Alan and Chuck Bush, a father and son restaurateur duo. The Bushes opened a few more locations in the area and officially began franchising in 2009. Over the decade that Fuzzy’s has been open, growth has remained steady. Today, Fuzzy’s Taco Shop has around 100 locations across 11 states.
The restaurant serves Baja-style Mexican food at an affordable price. Menu items include tacos, burritos, nachos, quesadillas, grilled sandwiches, salads, and breakfast dishes. A unique feature of Fuzzy’s is that the company wants each of its locations to feel unique to its franchisees and their local communities.
Fuzzy’s Sells 70 Percent Stake to Atlanta Investment Firm
In February 2016, Fuzzy’s announced that it had sold a 70 percent stake to Atlanta-based NRD Capital Management for an undisclosed amount. NRD Capital Management describes itself as the first franchisee-sponsored and managed equity investment fund.
Chuck Bush, the (now former) president and co-founder of Fuzzy’s Taco Shop says that the sale would help to expand the company’s corporate and franchise growth. In a prepared statement Bush said, “We knew that to grow our business dramatically, we needed a partner who knows franchising, has access to qualified developers and is willing to partner with our existing team to enhance the brand and maximize growth.”
NRD also owns Cincinnati-based Frisch’s Big Boy Restaurants, which it purchased for $175 million in August 2015. Aziz Hashim, NRD Capital founder and managing partner says that NRD will keep Fuzzy’s headquarters in North Texas and continue to grow the number of corporate-owned locations.
President and Co-Founder Steps Down
Seven months after selling a 70 percent stake to NRD Capital Management, Chuck Bush, co-founder and longtime president of Fuzzy’s Taco Shop announced that he would be stepping down from the company. Bush says that he trusts NRD to lead Fuzzy’s toward new growth and that he wanted to leave to pursue new interests.
For now, vice president of Fuzzy’s Mel Knight and NRD will fill Bush’s shoes and continue to guide the company’s growth. Bush will remain as a consultant as the new leadership takes over.
Fuzzy’s Opens 100th Location
In early August 2016, Fuzzy’s opened its 100th location with a new unit in Oklahoma City. In addition to the 100th location, two new units opened in Texas that same week. At the end of August, Fuzzy’s opened its first Las Vegas location.
To celebrate the 100th location, Fuzzy’s held social media contests and launched new merchandise including a new purple souvenir cup. The new souvenir cup was available with the purchase of a large soft drink. The Oklahoma City location also held daily giveaways.
Additionally, the Oklahoma City location held a pre-opening benefit which raised $2,300 for Oklahoma Cleats for Kids, a non-profit that collects and distributes sports shoes, clothes, and equipment to kids in need.
Middle of the Pack on Entrepreneur’s Franchise 500
Fuzzy’s Taco Shop did not start ranking on Entrepreneur’s annual Franchise 500 list until 2014. That year, the taco restaurant landed at spot No. 274. In 2015, Fuzzy’s was ranked No. 259, its highest ranking to date. For 2016, Fuzzy’s earned the No. 271 spot on Entrepreneur’s list.
Section II – Estimated Costs
- Please click here for detailed estimates of Fuzzy’s Taco Shop franchise costs, based on Item 7 of the company’s 2016 FDD (updated).