With their franchisor facing potentially major changes, Qdoba Mexican Eats franchisees have opted to band together.
On Friday, the operators announced the formation of the Qdoba Franchisee Association, an independent organization “to protect and enhance” franchisees’ “collective $250 million investment” in the brand.
“We want to speak as a powerful voice as franchisees,” Ron Stokes, chairman of the association, told Nation’s Restaurant News. “Given the uncertainty with the brand, we think we need to be consolidated in protecting our interests and investments.”
The franchisees have hired an attorney, W. Michael Garner of the Minneapolis law firm of Garner & Ginsburg PA, and the association management firm Elevanta LLC to run daily operations.
Stokes said the association wasn’t formed out of conflict with the brand. In fact, one of the primary goals is to ensure that Qdoba continues with its current plan.
Last year, for instance, parent company Jack in the Box Inc. named Keith Guilbault as Qdoba’s brand president.
“We are supportive of some of the leadership,” Stokes said. “We want to see that leadership and continuity stay.
“There’s no dynamics,” he added. “There wasn’t any impetus behind our forming of the association. We don’t have any major gripes the association needs to stand up for.”
Qdoba’s same-store sales have been uneven in recent years, including last year, when rival Chipotle Mexican Grill struggled. Qdoba’s same-store sales declined 3.2 percent in the first quarter.
In May, Jack in the Box hired Morgan Stanley & Co. LLC to evaluate alternatives for Qdoba, amid concerns about valuation.
“It has become more apparent … that the overall valuation of the company is being impacted by having two different business models,” Jack in the Box CEO Lenny Comma said at the time.
Jack in the Box, a quick-service burger chain, is mostly franchised. But Qdoba franchisees operate slightly less than half, or 340, of the chain’s 717 restaurants.
Comma’s comments could mean the company refranchises many of the locations. But there has long been speculation that Jack in the Box could sell Qdoba or spin it off to investors.
Stoke said franchisees needed a voice, given the future’s unknowns.
“With the uncertainty in the brand, we want to be sure a potential new owner knows we are a powerful, consolidated, professional franchisee association that wants to see the interests of the brand is furthered,” Stokes said.
He added that the operators in the association have a good relationship with the brand. In fact, the leaders behind the association were part of Qdoba’s existing franchisee advisory council.
“We feel like there’s some positive momentum, with the leadership changes and the team leaders put around them,” Stokes said. “They’re taking some positive steps.”
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