QDOBA Restaurant Corporation (“QDOBA”), the leading fast-casual Mexican restaurant franchisor and portfolio company of Butterfly Equity (“Butterfly”), announced the closing of its inaugural $305 million whole business securitization through Qdoba Funding LLC.

The transaction optimizes QDOBA’s capital structure for ongoing growth and provides meaningful interest expense savings. Proceeds from the transaction will be used primarily to refinance QDOBA’s existing senior debt facilities and provide liquidity to invest meaningfully in general corporate initiatives, such as remodeling more than 80 corporate restaurants and adding digital menu boards to 150 restaurants.

QDOBA was acquired by Butterfly in 2022 and has achieved an asset-light business model in the last year by undergoing a large refranchising of over 120 of its 750 restaurants – shifting its franchise mix to nearly 80%. Despite industry headwinds, QDOBA was also able to achieve 6% positive systemwide same store sales growth in fiscal year 2023, ending October 1st. Earlier this year, the firm appointed Applebee’s veteran John Cywinski as Chief Executive Officer and former SONIC Drive-In Head of Technology Prashant Budhale as Chief Technology Officer.

“We’ve experienced immense transformation over the past year and are proud to announce this transaction as we look to further QDOBA’s status as the #2 Mexican fast-casual brand in the U.S.,” says Mr. Cywinski. “This deal positions QDOBA for accelerated investment and growth in what I believe to be the most attractive category in the restaurant industry.”

Under Cywinski, QDOBA plans to approximately double its unit count to a long-term target of roughly 1,500 restaurants.

“Under Butterfly’s ownership, QDOBA has continued to accelerate and emerge as the leading Mexican franchisor uniquely suited for this transaction,” states Francesco D’Arcangelo, Principal at Butterfly. “This is more than a financial milestone; it’s a testament to our conviction in QDOBA’s capacity to propel the fast-casual Mexican sector, and we are thrilled to be a part of its remarkable growth and evolution.”

Barclays Capital Inc. (“Barclays”) acted as sole structuring advisor and sole bookrunner, Kirkland & Ellis LLP served as special counsel to QDOBA, and Milbank LLP served as special counsel to Barclays.

Fast Casual, Finance, Growth, News, Qdoba