Fuzzy’s Taco Shop president Paul Damico has been part of many transitions during his 40-year restaurant career, so he was familiar with the process when Applebee’s and IHOP parent Dine Brands acquired the fast casual in December 2022.
The 128-unit company spent a full year going through meticulous integration, including over 30 software platforms and more than 50 weekly calls.
“It was not an easy task, but we’re done now,” Damico says. “It was the smoothest transition I’ve ever been involved with in my 40 years in the restaurant space. And now our job is to leverage that relationship and help this brand grow at an exponential rate. And that’s what we’re starting to see. So it’s been a fantastic ride for the last 12 months of integration.”
Although it experienced a major shift and closed a net of 10 units post-acquisition, Fuzzy’s now finds itself on solid ground amid a tenuous macroeconomic environment. Damico attributes the brand’s performance to using higher-quality menu innovation. Notable among these is the Cali-Style Steak, marking the brand’s first foray into combining French fries and steak in a taco. Another standout is the Chicken Elote, featuring street corn and other vibrant ingredients. Prior to Cali-Style Steak, the Baja Fish Taco was launched, which contains hand-battered fish with Modelo beer, complemented by pickled onions and cilantro. Additionally, the birria platform—inspired by a visit to San Diego to explore the Baja culinary scene—has been well-received by guests.
Recently, Fuzzy’s has focused on taste and presentation to ensure its tacos and burritos not only taste well but are also visually enticing.
The fast casual’s momentum has translated to significant franchise deals. Last fall, Fuzzy’s announced a 20-unit agreement in Nevada with Mark Justice and his restaurant management company Mr. Stax, Inc. He became the first IHOP franchisee to officially enter the system. In May, Fuzzy’s announced two more agreements: The first is a contract with existing franchisee Marc Rogers of Rogers Restaurant Group, who will open 15 restaurants in Phoenix and other parts of Arizona by 2032. The operator opened his first Fuzzy’s in Fort Collins, Colorado, in 2011, and he now owns 16 units in the state. The second agreement is with Hnreck Nazarian of Nazarian Global Enterprises, a new franchisee scheduled to debut 25 locations in Houston over the next seven years. He’s worked as an IHOP operator since 2001.
“When you think about Mark Rogers or Hnreck in Houston, both of these individuals have proved already that they can fulfill large development agreements,” Damico says. “So they’re well-capitalized, they have significant infrastructure at the brand level, and have proven that they can open two and three and four restaurants a year consistently to fill out a development schedule. So that, for me, is gold. Because they’ve not only signed a big deal, but they’ve proven they’ve done it before. And that’s what I love about both these two people. One being organic and one being new.”
Fuzzy’s—overseeing outlets in 18 states, more than half of which are in Texas—is keeping eyes on new and existing markets across the U.S. For example, in Colorado, Damico believes the brand could fit four or five more restaurants. There’s much whitespace around the rest of the country, but real estate analysis shows that Orlando (current market), Jacksonville, Indianapolis, and Charlotte are the most valuable targets. Those are the focus, but that doesn’t mean if a well-equipped operator came along for Nashville or a similar trade area that Damico wouldn’t entertain the idea.
Currently, Fuzzy’s is receiving franchise growth interest from existing operators, IHOP franchisees, and restaurateurs outside the Dine family. The brand hasn’t seen incoming inquiries from Applebee’s, but there have been Fuzzy’s operators who’ve shown interest in joining Applebee’s system.
Damico understands that customers are drawn to the fast casual’s environment, with the TVs, sporting events, and music, along with the food. So over the past two years, Fuzzy’s has worked on new store models, including the traditional 3,500-4,000-square-foot prototype, a 1,500-square-foot taqueria concept ideal for urban settings, and a freestanding drive-thru option.
It’s important to note that the drive-thru comes with a typical speaker box and is not an order-ahead lane for mobile orders.
“Our ticket times are in the two to three minute range,” Damico says. “One of my favorite items in the entire restaurant is the Egg and Cheese Taco. We’re cracking fresh eggs on that grill. It is a scramble, it is cheese, it is the potato, and the service time for that for drive-thru is fantastic. That doesn’t make a difference either if we’re going to do a brisket taco or a brisket burrito. The speed of service is paramount in the brand, which is why we take so much time to carefully craft our recipes in the back of the house to accommodate those speed of service issues that every restaurant has. The one thing that you won’t find in our drive-thru are our enchilada plates. Because they just take too long and that would create havoc on the stack.”
The store designs are part of Fuzzy’s claim to the “fast casual plus” category, featuring not only elevated cuisine but also a full bar. This includes popular items like the Instagram-worthy Beerita, a 20-ounce frozen schooner with a margarita and an upside-down Coronita. The brand’s appeal is further enhanced by dog-friendly patios, a chef-driven menu, an energetic atmosphere with TVs, and an all-day breakfast—an uncommon feature in this segment.
“There’s nobody out there that provides that,” Damico says. “And so that’s why I think we’re seeing such interest in the brand to grow both from organic franchisees and new franchisees.”
