Butterfly Equity to Purchase Qdoba


Butterfly Equity, a Beverly Hills-based private equity firm specializing in the food sector, has entered into a definitive agreement with funds managed by Apollo Global Management to acquire Qdoba.

Qdoba, which is based in San Diego, is a Mexican fast-casual restaurant chain that has expanded through franchised locations. Alternative asset manager King Street Capital Management is investing in Qdoba as well.

The financial terms of the deal were not disclosed. Apollo had purchased Qdoba in 2018 from Jack in the Box Inc. for $305 million in cash and had contemplate selling Qdoba as early as 2019.

According to a report from Bloomberg at the time, Apollo was expecting roughly $550 million to sell the chain.
Butterfly plans to merge Qdoba into its Modern Restaurant Concepts platform, which also includes Lemonade and Modern Market Eatery.

“With this transaction, we could not be more excited to bring together three incredible restaurant brands in Qdoba, Modern Market and Lemonade to form one of the leading next-generation restaurant platforms,” Adam Waglay, co-founder and co-chief executive of Butterfly, said in a statement. “Together, these brands are incredibly positioned for the future with craveable food, flexible and affordable menu choices and a powerful off-premise offering.”

Qdoba currently has 750 locations in North America, of which 450 are franchised eateries. Once the deal is finalized next year, Modern Restaurant Concepts will have roughly 18,000 employees and 800 locations.

Qdoba’s current chief executive, Keith Guilbault, will become Modern Restaurant Concepts’ co-chief executive and continue to lead Qdoba.

“We are incredibly excited to partner with Butterfly in the next phase of Qdoba’s journey alongside Modern Market and Lemonade,” he said in a statement. “We’ve only scratched the surface of Qdoba’s potential to date, and Butterfly’s food focus will strengthen our ability to grow and deliver great food to our loyal customers.”

Rob McColgan, MRC’s current chief executive, will become co-chief executive and lead the Modern Market and Lemonade brands.

“Qdoba is an iconic brand whose reach will help us bring Modern Market and Lemonade to new consumers and franchisees around the country, particularly as we begin our own franchising journey,” he said in a statement. “We’re thrilled to welcome the Qdoba team to the Modern Restaurant Concepts family and believe that together we can build something truly differentiated in the restaurant space.”

Modern Restaurant Concepts is looking to expand all of its concepts to create more than 3,000 locations. MRC has signed a multi-unit franchise development agreement with an unnamed leading national franchisee, which will create more than 40 new Modern Market locations.

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