A Qdoba Mexican Eats in Gillette, Wyoming
|Qdoba Mexican Eats|
|Founded||1995 (as Zuma Fresh Mexican Grill)|
Denver, Colorado, U.S.
|Headquarters||San Diego, California, U.S.|
Number of locations
|United States and Canada|
|Products||Burritos, tacos, quesadillas, nachos, taco salad, tortilla soup, Mexican gumbo|
|Owner||Apollo Global Management|
Qdoba Mexican Eats (// kew-DOH-bə) is a chain of fast casual restaurants in the United States and Canada serving Mexican-style cuisine. After spending 15 years as a wholly owned subsidiary of Jack in the Box, the company was sold to a consortium of funds led by Apollo Global Management in March 2018. At the time of the sale in 2018, Qdoba had more than 700 locations in 47 states, the District of Columbia and Canada.
This chain traces its origins to the opening of the Zuma Fresh Mexican Grill in 1995 by Colorado native Anthony Miller and partner Robert Hauser at Grant Street and Sixth Avenue in Denver which is still in operation.
Miller and Hauser met in New York City, where Miller was an investment banker with Merrill Lynch when Hauser was attending the Culinary Institute of America and working at the famed Le Cirque restaurant. Hauser developed most of the recipes and tried to design the menu to be healthier by replacing the use of traditional animal fats with vegetable oils and tried to use more fresh vegetables and herbs when he could. During the first year, lines stretched out the door during most evenings at dinnertime, but it usually took roughly seven minutes for customers in a 30-person line to get served. Zuma was a made-up name but was also the name of a friend's cat.
The Denver, Colorado, location was an immediate success, with first-year revenues exceeding $1,500,000. The cost of opening the 1,300-square-foot (120 m2) store had been only $180,000.
In 1997, the name of the company was changed from Zuma to Z-Teca Mexican Grill because of a lawsuit from another restaurant using the Zuma name in Boston and confusion caused by the similar-sounding ZuZu Handmade Mexican Grill chain that was operating in the Denver area at that time. During the same year, Z-teca began to offer franchise opportunities to entrepreneurs to expand the chain outside of its core territory of Colorado.
In exchange for a large stake, Western Capital and other investors gave the company a large infusion of capital in early 1998 to allow the company to open 25 new locations and nearly triple its size. Later that year, Gary Beisler was hired in 1998 to replace Miller as president and chief operating officer while Miller remained as chief executive officer. By mid-1998, Z-Teca had 21 locations in 9 states, with 10 of those locations being franchises. At that time, a chicken burrito cost only $4.79. By December 1999, Z-Teca had 49 locations in 19 states.
Even though Z-Teca was another made-up name, there were lawsuits made by Z'Tejas Southwestern Grill in Arizona and Azteca in Washington state that the Z-Teca name was too similar to their names and it infringed on their tradenames. To overcome these problems, the name Qdoba was invented in 1999 by ad agency Heckler Associates. At the time of the name change to Qdoba Mexican Grill, Gary Beisler replaced Miller as CEO.
In 2014, Qdoba moved its headquarters from its longtime home in Wheat Ridge to nearby Lakewood. A little over two years later, San Diego-based corporate parent Jack in the Box decided to integrate Qdoba's headquarters into Jack in the Box's main headquarters in California starting in January 2017.
In December 2017, a consortium of funds led by Apollo Global Management announced the purchase of the Qdoba chain for approximately $305 million. At the time of the announcement, Qdoba had approximately 700 restaurants in 47 states. The sale was completed in March 2018. Jack in the Box Inc. received $305 million in cash for more than 700 locations in 47 states, the District of Columbia and Canada. In June 2019, Qdoba finally moved its headquarters from the building that it had previously shared for the past two years with its former corporate parent Jack in the Box in Kerney Mesa to the Amp&rsand building in Mission Valley.
As of 2013, Qdoba operates over 600 fast-casual restaurant locations throughout the United States.
The first Canadian location opened on December 3, 2012, in Brandon, Manitoba. A second location was opened in London, Ontario, three months later. A third location opened in Winnipeg in 2014.
Qdoba repurchased 25 stores located in Kentucky, Indiana, and Tennessee from ZT of Louisville, Inc., one its largest franchisees, for an undisclosed sum in mid-2012. Tim Casey replaced Gary Beisler as CEO in March 2013. In June 2013, Qdoba announced it would close a total of 67 underperforming restaurants, including 18 in and around Chicago.
In October 2014, Qdoba changed their price structure to "all-inclusive" in which the price only depended on the type of protein ($7.80 for chicken or vegetarian items and $8.40 for steak, shredded beef or pork), but included all of the "extras" that previously incurred an additional charge, such as guacamole and queso sauce. Most people who routinely ordered the "extras" with their burritos did not see much of a price difference after the new prices went into effect. However, light eaters complained that if they wanted to maintain their light eating habits by getting a simple plain item, they were hit with as much as a $2-per-item price increase (as an example, the Craft 2 which went up to $8.40 from $6.49) by paying for items they did not choose to get (like the guacamole), subsidizing other customers who usually paid for the "extras" in the past and, if they chose to get the extras which they normally don't get, those light eaters would increase their waistline through the increased intake of calories, fat, and salt that usually accompanied those "extras".
Faced with sluggish growth, management decided to make a change in their marketing strategy. As part of the new strategy, the trade name of the restaurants was changed to Qdoba Mexican Eats in October 2015 in the hope of trying to distinguish itself from similar-sounding competitors.
By July 2016, the company had 650 restaurants in 47 states, the District of Columbia, and Canada.
Qdoba serves burritos made in the San Francisco burrito style, and other foods such as tacos, quesadillas, chile con queso and Mexican gumbo. The restaurant fits into the "fast casual" category, offering both quick service and a higher quality of food than typical fast-food restaurants. Customers order by selecting an entrée then choosing its ingredients. All of the items are made in plain view of the customer.
To distinguish itself from some of its competitors, Qdoba serves breakfast, and some locations are open 24 hours on weekends.
The main national rivals to Qdoba are Chipotle Mexican Grill (which also started in Denver, two years before Qdoba), Baja Fresh, Moe's Southwest Grill and, to a lesser extent, Panchero's Mexican Grill.
In 2006, the company was involved in a lawsuit in which Panera Bread attempted to invoke a clause in Panera's contract with the White City Shopping Center in Shrewsbury, Massachusetts, to stop the opening of a Qdoba Mexican Grill. The clause provided that Panera would be the only sandwich shop in the shopping center. Panera argued that burritos and other tortilla-based foods were, in fact, sandwiches. Superior Court Judge Jeffrey Locke ruled against Panera, concluding, "A sandwich is not commonly understood to include burritos, tacos and quesadillas, which are typically made with a single tortilla and stuffed with a choice filling of meat, rice, and beans." However, the Qdoba in Shrewsbury has since closed, while Moe's Southwest Grill and Chipotle Mexican Grill remain open across the street. Qdoba however revived and opened with Whole Foods in Lakeway Commons which is also in Shrewsbury, Massachusetts but abruptly closed along with Dedham, Burlington, and Newton.
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- Parker, Penny (September 9, 1995). "Restaurant rush taking a breather?". Denver Post (Rockies ed.). pp. D-01.
Here's a list of other eateries that will soon compete for diners' dollars... Zuma - A big-burrito place opening at Grant Street and Sixth Avenue
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Zuma turns out Denver's favorite sort of nueva cucina Mexicana: burritos the size of Orson Welles... While it will take some doing to knock Chipotle off the crown of the hill, Zuma isn't just a copy cat... One of Zuma's partners, Bob Hauser, graduated from New York's Culinary Institute of America. He does most of Zuma's cooking, and the skill shows... Zuma relies less on lard or animal fats to carry flavor and more on polyunsaturated cooking oils and fresh herbs and spices. It's a good idea and a tasty one, to boot.
- Parker, Penny (June 10, 1996). "Giant burritos invade trendy eateries' scene". Denver Post (Rockies ed.). pp. E-01.
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The restaurant company, based in Denver, has registered to sell franchises in 40 states, said co-founder Tony Miller. In its first franchising deal, Z-Teca has signed with a group in Phoenix to open 12 stores, and the company is currently negotiating with groups in three other states to franchise 10 or more stores in each of those territories.
- Parker, Penny (March 2, 1998). "Investors Are Pumping Big Bucks Into Big Burritos: Major investment groups make sure Z-Teca gets lots of Z capital". Denver Post. pp. C-01.
Now it's Chipotle competitor Z-Teca Mexican Grill's turn. Denver's slightly smaller burrito chain, with 12 restaurants, has attracted two major investment groups infusing enough capital into the business for it to open 25 new company-owned stores by the end of the year. Western Growth Capital LLC, a private firm in Denver, specializes in investing in emerging companies in the Rocky Mountain region, said Don Anderson, one of five partners in Western Growth. The other new Z-Teca investors are three heavyweights in the fast-food industry. They are: Martin Hart, a board member for Papa John's America, the pizza franchise company; Jack Laughery, former CEO of Hardee's; and Dan Carney, the founder of Pizza Hut.
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Z-Teca Restaurant Corp. named Gary Beisler president and chief operating officer.
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- Bunn, Dina (July 28, 1998). "Z-teca Chain Plans Design Make-over 'this Is . . . From Simple Logo to Something More Sophisticated.' - Founder Tony Miller". Rocky Mountain News (Final ed.). p. 4B.
Z-Teca has grown with the help of franchising. Ten of the 21 are franchises. Of the 40 expected to open this year around the country, 26 will be franchises.
- "Z-Teca changes name". Denver Business Journal. December 17, 1999.
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Z-Teca Restaurant Corp. will change its name and the signs on all of its 49 restaurants next month to a word that has no meaning. Q-Doba is a made-up name to amuse customers while keeping the chain of Mexican grill restaurants out of court. Z-Teca lost a federal trademark infringement case this summer in Spokane, Wash., to Azteca, a Seattle-based restaurant chain. The Azteca name was registered 10 years before 5-year-old Z-Teca registered its trademark. Z-Teca was forced to take its name down from its two Spokane restaurants, which now operate under the No Name Mexican Grill moniker. Z-Teca also was threatened with another lawsuit by Z'Tejas Grill, a seven-unit restaurant chain based in Scottsdale, Ariz... Z'Tejas' name was registered 12 years before Z-Teca... This is not the first time Z-Teca has changed its name. The first store, which opened near Grant Avenue and Speer Boulevard, was originally named Zuma. Zuma was the name of a cat that belonged to a roommate of the restaurant's co-founder, Tony Miller. But shortly after opening, they discovered there was a Zuma restaurant on the East Coast. The owner was not interested in selling the name... Q-Doba means whatever we want, Beisler said. It's an empty vessel we can fill up with whatever we want.
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- "Qdoba Frees the Flavor; "Extras" No Longer Cost Extra". MarketWatch (Press release). October 3, 2014.
- "Comments to "Colorado friends - join us downtown at 17th & Welton and you can get some of your nickels & dimes back! We'll be hanging out..."". Facebook. October 3, 2014.
- "Comments to "Price changes? I noticed that ur prices... - Shelly Ferguson Lindegren"". Facebook. November 5, 2014.
- Curtis, Nathan (November 6, 2014). "PILE IT ON! Qdoba Goes Toppings Wild...but at a Price". GutCheck.
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- Hammett, Conner (February 16, 2018). "Qdoba Officially Opens at Fort Meade Exchange Food Court". Army & Air Force Exchange Service.
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