In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Costa Vida franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Costa Vida 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 Costa Vida franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Costa Vida’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average sales, cost of goods sold, labor, advertising, repair and maintenance, supplies/uniforms, utilities, and EBITDAR for the high ($1,200,000 and above in annual sales), mid-level (between $800,000 and $1,200,000 in annual sales), low ($800,000 and below in annual sales), and all 67 traditional Costa Vida Fresh Mexican Grill Restaurants that operated in the United States for the entire year ending December 31, 2016
Section I – Background Information
11 Things You Need to Know About the Costa Vida Franchise
Outpaces Fast-Casual Industry with 10.8% Growth
1. Costa Vida Fresh Mexican Grill reported double digit growth in 2016, with average unit volume increasing by 10.8%. The company says that its efficient supply chain, sales growth, and streamlined operations make it a great choice for restaurant investors.
2. This was Costa Vida’s third consecutive year of growth in average sales. According to Fast Casual magazine, Costa Vida outperformed the overall fast-casual chain sales growth of 8.1% in 2016, and exceeded the overall restaurant industry growth of 3.6%.
Celebrating National Tortilla Day
3. On June 5th, Costa Vida Fresh Mexican Grill celebrated National Tortilla Day by encouraging diners to “Viva la tortilla!” with free, fresh tortillas and discounted smothered sweet pork burritos. This is the third National Tortilla Day as Costa Vida first declared the holiday on June 4, 2015 to celebrate the anniversary of its first franchise location opening on the same day in 2003.
4. Costa Vida has decided to celebrate National Tortilla Day every year on the first Monday following Memorial Day weekend. In honor of the day, participating Costa Vida locations offered free tortillas throughout the day as well as a promotion for the chain’s signature dish, the smothered pork burrito entree.
5. Dave Rutter, President and CEO of Costa Vida Fresh Mexican Grill, said “Tortillas are a staple of authentic Mexican cuisine and the essential element of many of our dishes. Costa Vida is proud to offer each guest a chance to experience fresh, authentic Mexican taste across the United States.”
Additional Toppings at No Extra Charge
6. In early December 2016, Costa Vida announced that all add-ins, with the exception of guacamole, will be included with the purchase of a Costa Vida entree. Free add-ins include sour cream, jalapenos, and grilled veggies – guacamole, extra salsa, and extra dressing will continue to come with an additional cost.
7. Prior to this menu change, Costa Vida announced over the summer of 2016 that its signature “smother” would be included with all burrito orders for free.
8. Costa Vida Fresh Mexican Grill was founded in 2003 by JD and Sarah Gardner in Layton, Utah. The Gardners were inspired to open Costa Vista by a trip to Cabo San Lucas, Mexico. They wanted to make authentic coastal Mexican cuisine accessible to Americans. In order to stay true to the food that inspired the Gardners, Costa Vida’s food is made fresh daily in each restaurant’s kitchen, including the handmade tortillas and guacamole.
9. In 2011, Abundant Brands merged its Bajio Mexican Grill chain into Costa Vida, ultimately becoming a franchisee, and rebranding its 16 existing units.
10. Today, Costa Vida Management Co. operates company-owned stores and oversees franchisees. There are over 100 Costa Vida Fresh Mexican Grill locations in the U.S. and Canada.
Entrepreneur’s Franchise 500
11. Costa Vida has yet to earn a spot on Entrepreneur’s annual Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Costa Vida franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Costa Vida’s 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
- The following table represents average 2016 financial performance for 67 Costa Vida restaurants that operated in the United States for the entire year ending December 31, 2016.
- While there were 83 Costa Vida restaurants operating as of December 31, 2016, 16 restaurants have not been included because they (i) did not operate in the United States, (ii) did not operate for the entire year ending December 31, 2016, or (iii) are non-traditional restaurants.
- The data in the table is grouped into four with the first three showing the highest one-third, middle one-third, and lowest one-third based on average sales performance, and the fourth group showing an average for all locations.
High ($1,200,000 and above)