Wednesday, March 4, 2020

[EXCLUSIVE] Torchy's Tacos Taking Their Tacos to Georgia

The Texas invasion continues.  Several well-placed real estate sources tell ToNeTo Atlanta that Austin-based Torchy's Tacos is scouting metro Atlanta for multiple locations.  The taco chain, which has a cult-like following, reportedly has no deals done yet, but is close to securing at least one metro Atlanta outpost.  Sources tell ToNeTo Atlanta that the chain is targeting "the usual" in-town and suburban locations such as Buckhead, Dunwoody/Perimeter/Sandy Springs, Roswell and Alpharetta, among other parts of town.  The fast casual restaurant, where patrons order at a counter, is referred to by management as "craft casual," given the restaurant's focus on high quality ingredients. 

Torchy's entrance into the Atlanta market follows the arrival of Texas-based Velvet Taco and Grub Burger Bar, as well as the upcoming arrivals of both Alamo Drafthouse and Buc-ee's.  

Mike Rypka, a former corporate chef and lover of tacos, started Torchy’s in 2006 with a "taco trailer" in Austin.  In the years since, the chain with its "damn good" tacos has grown to include dozens of brick & mortar locations in Texas as well as a handful of other states.

The chain boasts “a taco for every appetite,” and its menu includes a wide variety of veggie and non- veggie tacos such as the fried avocado taco, or “The Independent,” which includes Portobello mushroom strips, refried black beans, roasted corn, Escabeche carrots, queso fresco, cilantro, avocado and ancho aioli. 

Other tacos include “The Democrat,” barbacoa, avocado, cojita cheese, cilantro, onions & a lime wedge with tomatillo sauce on a corn tortilla. “The Republican,” grilled jalapeno sausage, pico de gallo & cheddar jack cheese with poblano sauce on a flour tortilla, and “Mr. Orange,” blackened salmon, grilled corn & black bean relish, cojita cheese, cilantro & a lime wedge with avocado sauce on a corn tortilla, and the "Tipsy Chick," marinated &grilled chicken breast, spinach, grilled corn, green chiles & cheddar cheese with chipotle sauce on a flour tortilla with a side of bacon marmalade. 

Torchy's also offers a variety of breakfast tacos and is open for breakfast, lunch and dinner. 

The chain, which in 2017 received a minority investment from General Atlantic, a New York-based private equity firm, has seventy-five locations open with another seven coming soon, according to its website.  General Atlantic, whose investments have included Uber, BuzzFeed, StockX, airbnb, Vox Media, Tory Burch and European Wax Center, among others, does not appear to have done much in the restaurant space - save for a prior stake in Barteca (Barcelona & Bartaco) -  but reportedly found Torchy's growth potential and stellar reputation too good to ignore. 

Fifty-nine of the chain's existing seventy-five locations are in their home state of Texas, with another five in neighboring Oklahoma.  There are eight Torchy's in Colorado and another two in Arkansas.  More recently, however, the chain has expanded to new markets with three coming soon to Louisiana, and at least one coming soon to Kansas City, Missouri.

Judging from the Torchy's website, the chain seems to prefer endcap and freestanding restaurants, which according to real estate sources are often at least 3,500 square feet.  That said, the chain has taken over existing spaces and converted them.  In Waco, Texas, for instance, the chain took over a vacant former Taco Bueno restaurant and added patio seating in place of the drive-thru window and lane.  

In January, Torchy's CEO G.J. Hart spoke to a packed room of investors at the ICR Conference in Orlando and shared some of the company's growth plans and sales figures.  Hart indicated that he plans to more than double the size of the chain to at least 160 units by the end of 2023 from just 71 units today. The roll-out will include growth into at least 15 states up from the six where Torchy’s operates (or will soon operate) today.  In the very long run, Hart imagines an ultimate potential for 1,500 locations in the United States.  

Torchy's popularity translates to extremely high average unit volumes (AUV), just below $4 million per restaurant per year, according to industry publication QSR. That compares with a peak AUV of around $2.5 million at Chipotle and $1.5 million at Taco Bell.  Industry estimates indicate that Atlanta-based Chick-fil-A generates just over $4 million per restaurant, but of course, is only open six days a week. 

Some have compared Torchy's to Shake Shack which started as a hot dog cart in New York's Madison Square Park in 2004 and today has morphed into a full-blown restaurant chain with more than 250 locations worldwide, including four in metro Atlanta. 

In Georgia, Torchy's will enter a market already penetrated by fellow Texas chain Velvet Taco.  The chain, which started in Dallas in 2011, like Torchy's, received in 2016 a strategic investment from private equity firm L Catterton to fuel their growth.  Velvet Taco opened their first Atlanta area location this past September and has a second slated to open late this fall at The Interlock in West Midtown.  There are currently fourteen Velvet Tacos throughout four states.  

There is reason to believe the first Torchy's could open in metro Atlanta within the next twelve to eighteen months.  

Are you excited for the planned Atlanta entry by Torchy's Tacos?  Have you ever been to Torchy's Tacos?  Where would you like to see Torchy's open in metro Atlanta?

Please share your thoughts below.  

8 comments:

Anonymous said...

I hope it's better than chronic tacos that supposedly was so good georgia wasn't going to be able to stand it. The one in Chamblee is never busy and has to be hemorrhaging money.

Anonymous said...

This is great news. We always go to Torchy's when we visit family in Texas. It is truly fantastic. The main negative is the lines are long and the tables are limited, so it's a pain to sit there and eat.

Greenwave said...

Looks very meh. Can we get some tacos from restaurants in San Jose?

Anonymous said...

They ave a Gluten Free menu which makes me happy, but all the tacos have cheese. Since I am also Dairy free I hope the tacos will still taste good

Anonymous said...

THE BEST TACOS EVER

Anonymous said...

not another wannabe fancy taco chain.

fbenario said...

"Sources tell ToNeTo Atlanta that the chain is targeting "the usual" in-town and suburban locations such as Buckhead, Dunwoody/Perimeter/Sandy Springs, Roswell and Alpharetta, among other parts of town."

As a general matter "such as" and "among other parts of town" communicate the same point, so really don't need to appear in the same sentence. Otherwise I like your style.

David said...

Please replace the Tin Lizzy in East Cobb. Thank you.

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