To date, you could say Fuzzy’s Taco Shop’s has taken a reverse approach to growth. Despite a franchise program that dates back 12 years, and the oversight of NRD Capital, a private-equity firm that specializes in the space, the brand really hasn’t marketed the opportunity. It let development happen organically.
When NRD Capital—the same fund that took Ruby Tuesday private through a $148 million buy-out in early 2018—invested in Fuzzy’s nearly four years ago, there were 80 locations. The brand started 2016 at 86 restaurants to be exact and finished with 107. By 2018, there were 134, and Fuzzy’s headed into 2019 with 147 locations.
And so far, roughly 80 percent of the growth has come from existing franchisees.
That focus is ready to shift, however, says Michael Mabry, Fuzzy’s first chief development officer. He officially joined the company in the newly created role in April after close to a decade as president and COO of MOOYAH Burgers, Fries and Shakes.
Mabry’s appointment completed an evolving leadership structure that came together in a four-month space. Kevin Rychel, a three-year Fuzzy’s veteran, was promoted to VP of operations; Samir Wattar VP of supply chain; and Laura Purser took on the role of VP of marketing. David Catalano, the former COO of Logan’s Roadhouse, joined in the same position last September.
All of these moves stirred against the backdrop of franchise acceleration. Namely, bringing new operators into the picture.
Currently, 53 franchisees run nearly 150 locations and have another 70 in development, the company said. Fuzzy’s average-unit volumes last year were $1.48 million, according to a recent franchise disclosure document. In the 52-week period ending December 30, 2018, Fuzzy’s total revenue was $10,285,562, with net income of $3,896,212. Both were ahead of year-over-year figures of $9,461,582 and $3,566,209, respectively.
Mabry, an avid consumer of the brand, says Fuzzy’s could finish the year with 200 restaurants, or get there soon after the calendar turns. That would represent about 10 percent growth for the fast casual—a rate he doesn’t expect to dip under in the coming years. Fuzzy’s should track between 12–18 percent for the foreseeable future, he says.
If Fuzzy’s opens the 27 restaurants it has planned for 2019, it would have brought 88 net units to market in a four-year window, firmly placing it among the fastest-growing brands in its category.
This potential and progress is one reason Mabry linked up with the brand. He also knew Mel Knight, Fuzzy’s president, for a decade and was familiar with NRD Capital’s leadership through his time at Mooyah.