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Fifty-four units opened; 165 franchises sold; more than 350 development agreements in the pipeline. That’s just a glimpse into the picture of growth Moe’s Southwest Grill has been painting over the past year.
Growing at a rate of 20 percent each year—and opening a new unit every five to six days—the Southwestern fast casual is taking the limited-service industry by storm, sitting at No. 3 in Technomic’s list of top Mexican chains.
And with plans to open its 500th location in Q1 of 2013, Moe’s doesn’t see a slowdown in its path.
The brand wrapped up 2012 with comparable sales up 8 percent of 2011, and president Paul Damico says it expects to add an additional 150 units to its growing “backlog” of franchise agreements in 2013 alone.
“If we open 100 restaurants a year for the next [few] years, we’re going to well hit our growth of 1,000 restaurants,” he adds.
But the corporate team can’t do it alone. As a brand that’s 99 percent franchised, Damico knows Moe’s has to build a strong pool of experienced and talented franchise partners.
“[This growth] takes a really strong franchise system with really well-qualified and experienced franchisees, because they are really the ones that are growing the system,” he says.
The brand is searching for partners with past restaurant and franchising experience, a net worth of about $1.5 million, and around $500,000 in available cash, as well as the dedication to sign at least a three-unit development agreement.
And Damico says Moe’s has a lot to offer these potential partners. “You’ve got the fast-casual segment, and then you’ve got Mexican/Southwestern, which is the fastest-growing category,” he says. “So we’re kind of in that sweet spot right now. We’re still seeing casual-dining restaurants trade down, and we’re seeing fast-food customers trade up.”
Damico adds that the brand is dedicated to the business and its franchisees. “I believe in investing in the overhead, versus kind of growing into the overhead,” he says, “so we stay ahead of the curve.”
The brand—which operates in 34 states across the country—is also planning to open up new markets this year, including Texas and Nevada. “Based on the quality of franchise partners that we’re bringing into the system, the desire for our system to start growing west” will help the brand better serve its franchisees and sustain its quick pace of growth, Damico says.
Aside from its explosive growth, he says other exciting things will be taking place for the brand in 2013, too. First, Moe’s will see a greater national television presence, starting with Damico’s appearance on CBS’s “Undercover Boss” on January 18.
The brand will also spread its message through television campaigns for eight weeks throughout the year: first in March and April, and then again in June and July.
Because the campaigns will air in all 50 states, “We get to build brand awareness in the other states that we’re not currently in, and that will also help further franchising as we move west,” Damico says.
In addition, Moe’s will launch a new product in the fourth quarter, and Damico says the concept is leaning toward a Tamale Bowl. “We expect pretty good things from that,” he says. “It tested really well.”
With new marketing initiatives, product innovations, and around 75 units set to open in 2013, Damico says Moe’s will easily continue its expansion. “We are well positioned now for some really explosive growth of the brand,” he says.
By Mary Avant