QDOBA Completes Whole Business Securitization, Providing Additional Liquidity to Supercharge Growth

Butterfly portfolio company aims to refinance debt and invest in growth initiatives across its restaurant base

LOS ANGELES & SAN DIEGO–(BUSINESS WIRE)–QDOBA Restaurant Corporation (“QDOBA”), the leading fast-casual Mexican restaurant franchisor and portfolio company of Butterfly Equity (“Butterfly”), today announced the closing of its inaugural $305 million whole business securitization through Qdoba Funding LLC.

The transaction optimizes QDOBA’s capital structure for ongoing growth and provides meaningful interest expense savings. Proceeds from the transaction will be used primarily to refinance QDOBA’s existing senior debt facilities and provide liquidity to invest meaningfully in general corporate initiatives, such as remodeling more than 80 corporate restaurants and adding digital menu boards to 150 restaurants.

QDOBA was acquired by Butterfly in 2022 and has achieved an asset-light business model in the last year by undergoing a large refranchising of over 120 of its 750 restaurants – shifting its franchise mix to nearly 80%. Despite industry headwinds, QDOBA was also able to achieve 6% positive systemwide same store sales growth in fiscal year 2023, ending October 1^st. Earlier this year, the firm appointed Applebee’s veteran John Cywinski as Chief Executive Officer and former SONIC Drive-In Head of Technology Prashant Budhale as Chief Technology Officer.

“We’ve experienced immense transformation over the past year and are proud to announce this transaction as we look to further QDOBA’s status as the #2 Mexican fast-casual brand in the U.S.,” said Mr. Cywinski. “This deal positions QDOBA for accelerated investment and growth in what I believe to be the most attractive category in the restaurant industry.”

Under Cywinski, QDOBA plans to approximately double its unit count to a long-term target of ~1,500 restaurants.

“Under Butterfly’s ownership, QDOBA has continued to accelerate and emerge as the leading Mexican franchisor uniquely suited for this transaction,” stated Francesco D’Arcangelo, Principal at Butterfly. “This is more than a financial milestone; it’s a testament to our conviction in QDOBA’s capacity to propel the fast-casual Mexican sector, and we are thrilled to be a part of its remarkable growth and evolution.”

Barclays Capital Inc. (“Barclays”) acted as sole structuring advisor and sole bookrunner, Kirkland & Ellis LLP served as special counsel to QDOBA, and Milbank LLP served as special counsel to Barclays.

About QDOBA

QDOBA is a fast casual Mexican restaurant with 750 locations in the U.S. and Canada. Committed to delivering flavor to people’s lives, QDOBA uses ingredients prepared in-house, by hand, and fresh throughout the day, to create delicious menu options. Guests can experience QDOBA’s delicious flavors by enjoying one of its signature menu options that are chef-crafted for convenience and ease or by customizing their burritos, tacos, burrito bowls, salads, quesadillas, and nachos to fit their personal tastes. For five years running, QDOBA has been voted the “Best Fast Casual Restaurant” as part of the USA TODAY 10Best Readers’ Choice Awards. Discover more at www.QDOBA.com or on the QDOBA app, which is available for download on the Apple App Store or Google Play. Fans can also connect with QDOBA on Facebook, X, Instagram, TikTok and YouTube.

About Butterfly

Butterfly Equity is a Los Angeles, California-based private equity firm specializing in the food sector, spanning the entire food value chain from “seed to fork” via four key segments: upstream & processing, industry enablers, multi-site and branded goods. Butterfly manages over $4 billion of assets to date and aims to generate attractive investment returns through deep industry specialization, a disciplined and data-driven investment process and a hands-on approach to portfolio transformation. For additional information about Butterfly, please visit its website at www.bfly.com.

Contacts

Media:

Jaimee Cook / Carlin Pappas

Prosek Partners

pro-butterfly@prosek.com