Emerging Concepts | December 2011 | By Judy Kneiszel

One to Watch: Hot Head Burritos

Two multiunit Subway franchisees tap into popular Mexican fast-casual segment with their own growing brand.

Hot Head Burritos offers a range of fresh Mexican menu options.
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With four salsas and 12 sauces to choose from, diners at Hot Head Burritos can control the degree of spiciness in their food with a great degree of precision.

“We have really expanded on our sauces,” says Ray Wiley, who started Hot Head Burritos with his wife Cynde almost five years ago. “We opened with only one or two.”

Wiley describes the signature Hot Head Sauce as “a zesty garlic sauce with medium heat.”

“The next most popular sauce is Sweet Habanero, which has a little heat, and then Extreme Habanero, which is pretty warm but also sweet,” Wiley says. “There are a number of other sauces, including a Straight Habanero, for those who really like it hot.”

Spicy Sauce is the proprietary sauce recipe that makes the difference between the steak and spicy steak choices on the list of proteins customers can choose to add to their burrito, bowl, tacos, or nachos. Other protein choices are chicken, spicy chicken, pork, and ground beef.

“For the spicy steak and spicy chicken, we just add Spicy Sauce to it,” Wiley says. “The addition became so popular, we started offering the Spicy Sauce just as a sauce, too.”

The four salsas include Pico, which is mild; Corn and Verde, both described as medium; and Wild, a hot salsa.

Wiley says having the word hot in the name of the concept was an unanticipated hurdle early on for Hot Head Burritos. “From Mild to Wild” was added to marketing materials to reassure those who don’t like hot food that there are also choices for them at Hot Head Burritos.

Spicy wasn’t a word the Wileys used much in the past, since the couple had been Subway operators for about 20 years.

Hot Head Burritos

CoFounders: Ray and Cynde Wiley

HQ: Dayton, Ohio

Year started: 2007

Annual sales: Undisclosed

Total units: 20

Franchise units: 11

www.hotheadburritos.com

“We had 10 Subways and wanted to get bigger, but the Dayton area was full,” Wiley says. “We started looking at Mexican chains and thought we could do it better ourselves rather than become franchisees of an existing concept.”

That included Cynde developing all of the recipes for Hot Head Burritos.

“It took a couple of months to develop flavor profiles we were satisfied with, but we really haven’t changed them much since,” Wiley says.

While Cynde worked in the kitchen testing recipes, Wiley developed the concept’s identity, from the name and logo to the décor.

“I always had the dream in the back of my head to become a franchisor,” he says.

Originally, the concept’s menu consisted of burritos, tacos, and “N-a-Bowl” choices. Then nachos were added, as were smaller portions called the Li’l Bowl and Li’l Burrito. “The other Mexican chains are serving these huge portions, and a lot of people were coming to us and saying it was just too much,” Wiley says.

A regular-size chicken burrito is priced at $6.29, while the Li’l Burrito is $4.39. An average ticket per person at Hot Head Burritos is about $8.

The ground beef protein choice was initially just for kids’ meals, but is now available in any of the menu items. “It’s seasoned but not spicy, and a lot of adults order it,” Wiley says. “We sell a lot of the ground beef. “

Most Hot Head Burritos locations are in Ohio, with one store in Pennsylvania and two in Northern Kentucky.

“We have about 20 more in some level of development,” Wiley says. “Primarily in the Cincinnati, Dayton, and Columbus areas. But we are utilizing an area-developer program to develop franchises throughout the United States, which should result in a couple of hundred stores. We’re pretty aggressive and looking at growing pretty fast.”

Wiley hopes to see “a minimum of 40 stores” open in 2012.

“We seem to double about every year,” he says. “We started 2011 with 10 or 11 stores and will end the year with close to 30.”

The Wileys still operate 10 Subway restaurants in addition to Hot Head Burritos. He says they are compatible concepts.

“One of the things we learned from being a Subway franchisee and putting our first Hot Head Burritos location next to a Subway is that it didn’t affect business at the Subway,” Wiley says. “Everybody is trying to get the customer once a week. We learned we could add a Hot Head Burritos next to an existing restaurant and get the customer twice a week.”

Hot Head Burritos locations are generally open from 10:30 a.m. to 10 p.m.

“We’re all over the board when it comes to customers,” Wiley says. “But generally, 18–45-year-old males are our primary customers. Secondary would be females of the same age, but we see a lot of young kids, older adults, and families.”

A few of the Hot Head Burritos locations have done well near college campuses or in downtown business districts, but Wiley says he prefers suburban neighborhood strip malls.

“Business is consistent there, and I can get really good help,” he says. “Plus it’s more of a family atmosphere and we cater to a lot of families, especially in the evening.”