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FDD Talk 2017: What You Need to Know About the Qdoba Mexican Eats Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on May 28, 2017

in FDD Talk 2017: Food Franchises, Franchise Earnings, Mexican Restaurant Franchise



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In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Qdoba Mexican Eats franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Qdoba Mexican Eats franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Qdoba Mexican Eats franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Qdoba Mexican Eats’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016 average net sales for the 235 franchised Qdoba Mexican Eats restaurants that were open and operating for at least the last 3 years and that were open the entire fiscal year ending October 2, 2016
  • 2016 average gross sales, promotions, net sales, cost of sales, salaries and benefits, other operating expenses, depreciation and amortization, occupancy costs, operating margin, and EBITDA for the 282 company-operated Qdoba Mexican Eats restaurants that were open and operating for at least the last 3 years and that were open the entire fiscal year ending October 2, 2016
  • 2016 average net sales for corporate non-traditional Qdoba Mexican Eats units in airports, military venues, universities, and others (separately stated)
  • 2016 average net sales for licensed non-traditional Qdoba Mexican Eats units in airports, military venues, universities, and others (separately stated)

Section I – Background Information

12 Things You Need to Know About the Qdoba Mexican Eats Franchise

Committed to Improving Chicken Welfare

1.  In late March, Jack in the Box Inc., the parent company of Qdoba Mexican Eats and Jack in the Box, announced its support of an industry-wide effort to improve the welfare of broiler chickens. According to Lenny Comma, CEO of Jack in the Box Inc., the company has always been committed to the well-being of animals in its supply chain. Comma says that in recent years, the company has worked with suppliers to improve housing environments for egg layers and sows.

2.  The broiler supply chain changes that Qdoba and Jack in the Box have set as a goal to achieve by 2024 include the following:



  • Switching to broiler breeds approved by Global Animal Partnership (GAP) as having higher welfare outcomes
  • Reducing stocking density in barns, per GAP standards
  • Enhancing the birds’ living environments, including improved litter, lighting, and enrichment, per GAP standards
  • Switching to a multi-step controlled-atmospheric stunning that will help ensure that birds are rendered unconscious before processing

A New Queso Every Month in 2017

3.  At the beginning of the year, Qdoba announced plans to roll out a new queso variety every single month in 2017. To kick off the year of new quesos, January’s flavor was Cheeseburger Queso, which blended the smoky and savory flavors of bacon and beef with Qdoba’s 3-cheese queso. The new flavors debut at participating restaurants on the first of every month and remain on the menu for a limited time.

Partnership with Avocados from Mexico

4.  At the end of April, Qdoba announced that it had partnered with Avocados From Mexico, the United States’ No. 1 provider of avocados, to help customers throw the ultimate Cinco de Mayo party.

5.  Customers have until May 31 to enter the Fiesta Del Fuego sweepstakes by following @AvosfromMexico on Twitter, tweeting the avocado or chili pepper emoji at AFM and tagging the tweet with #guacit and #avosweepstakes for a chance to win the Ultimate Prize Pack.

6.  Five grand prize winners will receive the Ultimate Prize Pack which includes a $500 Visa gift card plus a $250 Q-cash card from Qdoba, and thirty first prize winners will receive a $500 Visa gift card.

Partnership with Groupon’s OrderUp

7.  In the summer of 2016, Qdoba announced that it had partnered with Groupon’s on-demand delivery service, OrderUp. The company says that the partnership will allow customers in over 40 markets to conveniently order food from Qdoba’s entire menu.

8.  At the time of the announcement, the OrderUp service was available in markets such as Baltimore, Maryland; Charlottesville and Richmond, Virginia; Cincinnati, Ohio; Indianapolis, Indiana; and Nashville, Tennessee.

Company History



9.  Qdoba Mexican Eats began its life as Zuma Fresh Mexican Grill, which was opened in 1995 by Anthony Miller and Robert Hauser in Denver, Colorado. Following a lawsuit, the restaurant changed its name to Z-Teca Mexican Grill in 1997 and also began franchising that same year.

10.  The company faced lawsuits from Z’Tejas Southwestern Grill in Arizona and Azteca in Washington, which stated that the Z-Teca name was too similar to their names and it infringed on their trade names. To overcome these problems, the Qdoba name was coined in 1999 by ad agency Heckler Associates.

11.  In 2003, Jack in the Box paid $43 million to acquire Qdoba Mexican Grill, which was subsequently renamed Qdoba Mexican Eats in October 2015. Today, there are over 650 locations in the U.S. and Canada.

Entrepreneur’s Franchise 500

12.  Qdoba Mexican Eats has ranked on Entrepreneur’s annual Franchise 500 list every year in the last decade, except in 2017. The company’s highest rank was No. 87 in 2007, while its lowest rank was No. 111 in 2016.

Section II – Estimated Costs

  • Please click here for detailed estimates of Qdoba Mexican Eats franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Qdoba Mexican Eats’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis



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