Dive Brief:
- Fuzzy’s Taco Shop will open 40 new units across Arizona and Texas in the next eight years, a roughly 30% increase in its overall unit count, through two franchising deals, the brand announced Thursday.
- Dine Brands acquired Fuzzy’s in late 2022, and finished integrating the fast casual taco chain into its system toward the end of fiscal 2023, according to its Q4 2023 earnings call.
- On that same earnings call, Dine CEO John Peyton said the company’s strategy to grow Fuzzy’s was “to recruit new franchisees to develop new markets, while also tapping into our IHOP and Applebee’s franchisee network.”
Dive Insight:
Existing Fuzzy’s franchisee Rogers Restaurant Group will develop 15 units in the Phoenix area and throughout Arizona. In Texas, where the brand has more than half its units according to Dine’s Q1 2024 earnings call, Nazarian Global Enterprises will developed 25 units in the Houston area. Nazarian is already a Dine franchisee, as NGE owns 23 IHOPs.
Fuzzy’s integration with Dine’s system entailed a number of strategic closures, Peyton said on the Q1 earnings call, dropping its unit count from 138 at the time of acquisition to 128 at the time of the Q1 call. On the call, Peyton mentioned the deals announced Thursday without revealing specifics, saying “while we won't see impact in 2024, these deals speak to the potential of Fuzzy's as our growth brand in 2025 and beyond.”
Dine’s strategy with Fuzzy’s has hinged on LTOs, and its 2023 LTOs were the most successful in the brand’s history. In 2024, Fuzzy’s “launched its new traditional Baja fish taco and premium Baja menu category,” Peyton said on the Q4 earnings call.
