Encinal Brands Latches Onto Soaring Mexican Food Segment

Ivan Flores’ first dive into restaurant ownership came in 2013, with the opening of Mexican concept El Encinal.

He did so without knowing enough about demographics and menu engineering, and all of his money went toward opening the restaurant. The result was swift and unforgiving.

“Within a couple of months, I already was out the door,” says Flores, who dreamed of owning a restaurant while working on his grandparents’ El Encinal Ranch in Mexico’s Baja California.

From that initial experience, Flores not only recognized the importance of real estate and price points, but also how to match products with customer demand. One of El Encinal’s most popular items was Buffalo Fries, and the restaurateur decided to make it the hero item for his next project. The product comprises golden crisp fries covered in hand-breaded, diced chicken and customers’ choice of 12 sauces. Flores also opted for a more populated area—full of desirable millennials and Gen Z customers—and landed in Long Beach, California.

That marked the beginning of The Buffalo Spot, a fast-casual chain that’s grown to more than 40 stores across California, Arizona, and Texas. Similar to what Flores saw at El Encinal, 70 percent of the brand’s business comes from Buffalo Fries. In 2019, the budding restaurateur added Blue Burro, another quick-service spot known for its burritos, shakes, and fries, with recipes he kept from his first restaurant. There are now three units in Southern California.

Then in October 2021, Flores launched Tacomasa, a new taqueria he fondly refers to as “one of my babies.” The Long Beach-based restaurant, with its vibrant blue, white, and black color scheme, is reminiscent of a taco stand in Tijuana, Mexico, where he grew up. With Latin music playing in the background, the location services authentic tacos, mulitas, tortas, and quesadillas.

Collectively, the trio falls under Encinal Brands, with Flores serving as CEO. While each of the three restaurants come with different offerings, one aspect unites them—a simple, easy-to-learn menu, an idea that was not lost on Flores when El Encinal closed nearly 10 years ago.

“I'm a true believer in a simple menu for my staff, for the customers,” Flores says. “It's super important to me. You can also cross-use your menu ingredients. Due to the inflation, you're able to save some cost there.”

The well-defined menus place The Buffalo Spot, Blue Burro, and Tacomasa in a position to franchise, and Flores expects 150–200 openings in the next five years. The plan is to grow concentrically out of California, Arizona, Nevada, and Texas. Recently, two Blue Burro outlets debuted in Gilbert, Arizona (corporate) and Lemon Grove, California, (franchise); two Buffalo Spot locations debuted in San Antonio (franchise) and Arlington (corporate); and a second Tacomasa unit is planned for Cypress, California.

“All of my brands are focused on those markets specifically because we want to be able to support our franchisees as we build,” Flores says. “Obviously we do want to go nationwide at one point, but that's a future goal. As of right now, this is our main focus and that's just to completely support our franchisees the right way.”

Blue Burro

Tacomasa

The company says future growth will be a 50/50 mix between new and existing franchisees.

Three locations are co-branded between Blue Burro and The Buffalo Spot, with one opening in San Diego a few months ago. Flores says his franchise footprint is a mixture of operators wanting to scale one concept to 10-15 units, and some multi-unit owners of The Buffalo Spot showing interest in parallel expansion with Blue Burro.

Flores says his company has several franchise leads, but he will proceed cautiously with operators he brings onboard. He notes that restaurant experience isn’t mandatory; the more important factor is loving the brand and showing a willingness to follow processes, which aren’t that complicated. Locations only require 1,300-2,200 square feet for a kitchen and dining room and 15-20 employees on average.

The CEO believes future growth will be a 50/50 mix between new and existing franchisees. In terms of how development will be divided among the three concepts, the projection is 50 percent The Buffalo Spot, and 25 percent each for Blue Burro and Tacomasa.

The split between operator/company-run expansion will be 80/20.

“So in order for us to be diligent and able to support our franchisees, we've got to really understand the operation, from choosing the location, from opening the store, from the food costs, labor costs, you know all the systems,” Flores says. “So that's why we've been very, very successful. And our franchisees could attest to the support we give them is that we know what they're going through. So when they reach out to us and explain to us certain challenges, we know exactly what they're talking about. And we do take our franchisees feedback and ideas due to that because we understand.”

According to IBISWorld, a hub of industry market research, the U.S.’s Mexican restaurant segment is growing at a rate of 7 percent in 2022, and Flores is confident about the figures spiking in the next five years. Although the cuisine has been a staple for many years, the restaurateur says the category is surging because of the implementation of online ordering, third-party delivery, and other pieces of technology that have opened it to a broader, younger consumer base.

As to how Encinal Brands became a part of this massive trajectory after how things began in 2013, Flores has been asked many times in the past several years. The answer, similar to how he runs his restaurants, cuts to the chase—hard work, dedication, and remaining consistent. He holds himself and his entire team to those standards each day.

“That's just what I keep doing every day, and I love what I do,” Flores says. “I wouldn't be doing anything else. That's just really what it is.”