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Texas Roadhouse plans to open "about five" Bubba's 33 locations this year.

Texas Roadhouse is ‘excited’ about growing its Bubba’s 33 concept

Texas Roadhouse plans to open ‘about five’ new Bubba’s 33 locations this year and three Jaggers locations.

Bubba’s 33 turns 10 years old this year. The concept created by the late Kent Taylor is known for its pizzas, burgers and wings – much different from the steak-centered Texas Roadhouse brand Taylor founded 20 years earlier.

Also unlike Texas Roadhouse, which was created to provide a family-friendly place where “everyone could come and have a great meal and great fun for a great price,” Bubba’s was born out of Taylor’s competitive nature.

“I had attended a restaurant CEO’s meeting … I received the cold shoulder from the heads of Outback and Applebee’s – no surprise there – but I got the same from the head of Buffalo Wild Wings. Since Texas Roadhouse was competing with the first two, I understood, but why would the head of a sports-bar franchise dis me? So, I decided to take a shot at competing with them,” Taylor wrote in his book, “Made From Scratch: The Legendary Success Story of Texas Roadhouse.”

He sketched out the entire concept that night, from the kitchen layout to the menu, which remains largely the same to this day. There are now 40 Bubba’s locations throughout the country – from New Mexico to Michigan to New Jersey – and there will soon be many more. During Texas Roadhouse’s Q4 earnings call Thursday, Michael Bailen, senior director of investor relations, touched on company’s expansion plans, including “about five” new Bubba’s this year and “a long runway to go."

“We are surely very excited about the concept,” he said. “We are very pleased with the returns on some of the more recent openings as well as some of the older ones. We believe in the concept, believe in its ability to generate that mid-teen (internal rate of return) we are looking for, which is the same return we are looking for at Roadhouse, and we are seeing great acceptance of the brand … in really all the areas we are opening them," he said. 

For context, the company has 20 to 25 Texas Roadhouse restaurants in development this year. The company is also planning to “see a little bit of growth” from its Jaggers brand, projecting three new locations this year, which would nearly double its footprint.

Taylor launched Jaggers in 2014, with a goal of creating “a place that would have better burgers than Five Guys and serve chicken tenders and sandwiches that could compete with Raising Cane’s and Chick-fil-A,” according to his book.

Taylor noted that both fledgling concepts took a couple of years of fine-tuning to get them right, but both now seemed poised for primetime. Both are also driving the company to readjust some of its expansion strategies.

“We have our targeted markets and states and growth areas,” CEO Jerry Morgan said. “And we’ve been working on this plan quite a while and it’s been very successful for us … But there is always competition, and there’s real estate to be had out there.”

That real estate extends beyond the company’s traditional suburbs. Interim CFO Keith Humpich said the company will stay “pretty tried and true” to its suburban footprint, but is also looking at urban markets with higher traffic and smaller communities with smaller populations.

“We’ve got a broad scope in a mind and are looking at every option. And I think at a company our size and what we want to accomplish, we got to stay true. But we have to test and try some new things that might help us,” he said. “And because we're looking at Bubba's, and we're looking at Jaggers, we're probably expanding and are looking at areas that would help all three brands. We have opened up the scope of where we will go and what we will try … and we’re excited to see how they turn out for us.”

Contact Alicia Kelso at [email protected]

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