The restaurant traders behind the success of Dave’s Sizzling Rooster are making a brand new nationwide guess on the next-hottest restaurant development: birria.
Mike’s Purple Tacos, a San Diego-based birria chain with simply two areas, plans to announce on Tuesday a brand new franchising initiative that may construct a whole lot of eating places throughout the U.S., with help from early-stage backers Invoice Phelps and Andrew Feghali, CNBC can report.
Monetary phrases of their funding, which came about in early 2025, weren’t disclosed.
“We simply noticed that this was a model and an idea that actually had legs to it,” Phelps informed CNBC. “After which the crucial factor is, we introduced down potential franchisees. … Everybody gave it the thumbs up.”
Phelps mentioned he had by no means heard of birria earlier than Feghali launched him to Mike’s.
Conventional birria is a beef or goat stew, sluggish cooked with spices and chiles to present the meat a number of taste. Birria tacos, like these offered at Mike’s, use the slow-cooked meat as a filling and normally embrace a consomme on the aspect as a dip for the taco.
As soon as referred to as a regional Mexican meals, birria now seems on 3.7% of U.S. menus, in line with Datassential. That is greater than quadruple its menu penetration 4 years in the past, based mostly on the agency’s information, however there’s nonetheless a protracted runway earlier than it reaches ubiquity.
Mexican-inspired fast-food manufacturers akin to Qdoba, El Pollo Loco, Del Taco and even Taco Bell have launched their very own variations of birria. And there is not less than 478 restaurant operators working birria-focused eating places, in line with Datassential.
Mike’s menu additionally consists of burritos, loaded nachos and fries, and birria ramen.
“It appeals to a really broad vary of friends — it is not simply your millennials and Gen Zs,” Phelps mentioned, talking concerning the clients in Mike’s Purple Tacos eating places. “There’s older individuals within the restaurant, there’s little youngsters, so it is obtained a really, very broad attraction.”
Phelps co-founded Wetzel’s Pretzels in 1994 and have become a founding investor in Blaze Pizza, the fast-casual pizza chain based by Elise and Rick Wetzel. In 2019, Phelps joined Dave’s Sizzling Rooster as an investor and CEO, utilizing franchising to increase the chain rapidly to a whole lot of eating places worldwide. Final 12 months, personal fairness agency Roark Capital purchased a majority stake in Dave’s Sizzling Rooster in deal value roughly $1 billion.
Feghali was one of many first franchisees of Dave’s Sizzling Rooster. He’s additionally one of many nation’s largest Little Caesars operators.
Collectively, Feghali and Phelps based 4 Wall Companions, a restaurant franchising funding agency. Along with being early-stage traders in Mike’s, they’ll act as advisors and members of the chain’s board.
Vincent Montanelli, who most just lately served as chief govt of Wetzel’s, has joined Mike’s to function president.
Based initially as a meals truck 5 years in the past, Mike’s Purple Tacos opened its first brick-and-mortar location in 2022. Founder Mike Touma plans to open his third location in March; he’ll keep on with the corporate as a board member and franchisee of the chain’s San Diego areas.
“We put collectively a deal the place [Touma is] going to maintain the rights to his shops and future shops in San Diego, after which we will franchise it throughout the remainder of the U.S. and internationally,” Phelps mentioned.
The brand new crew plans to comply with the established playbook utilized by Wetzel’s and Dave’s to develop Mike’s Purple Tacos rapidly.
“We’ll be very aggressive the place we develop with this, as a result of we have seen that we will try this,” Phelps mentioned.
The taco chain has already secured franchising improvement offers with multi-unit operators for greater than 200 areas nationwide, from California to Texas to New England. A few of these franchised eating places might open as quickly as the top of the 12 months.
Phelps anticipates stiff competitors from nationwide chains and native taco eating places alike. Nevertheless, he mentioned he thinks that the chain’s easy menu, scrumptious meals and an aggressive advertising and marketing technique may also help Mike’s overtake rivals.
“We predict this is usually a winner,” Phelps mentioned.
