Food service establishment barBurrito is in expansion mode with the chain exploring markets across Canada and it is open to buying out bankruptcy sales or liquidator opportunities.
The company, which first opened in 2005 in Toronto, currently has 113 locations including a recent opening in the United States in Canton, Michigan. The Canadian locations are spread out from coast to coast from the Maritimes to Nanaimo, B.C.
12 BARBURRITO STORES ARE UNDER CONSTRUCTION POST COVID-19 PANDEMIC
Shawn Saraga, Vice President of Business Development for barBurrito, said the company currently has 12 more stores under construction across the country. There are also 30 more franchisees looking for spaces in Canada.
He said the company believes it can grow to 400 locations over the next seven to 10 years. And barBurrito sees the US as probably a 3,000 store market.
“We’re a Mexican themed restaurant. We are actually licensed to sell beer as well and do sell beer in the majority of our locations. The majority of our locations are on grocery store anchors or Walmart shopping centres, power centre plazas. We’re typically between 1,000 and 1,300 square feet with a small patio,” said Saraga.
“We like high visibility, high street traffic locations. The total investment across Canada ranges from $300,000 to $340,000 for a franchisee of which they need around $100,000 to $125,000 in cash. Our sales on the low end are $400,000 to the high end of $1.6 million.
“We make the best burritos in town. And I’ll tell you the design of the way we make the burritos makes all the difference because our burritos don’t fall apart. You can actually have one of our burritos in your car while you’re driving without making a mess of yourself. And the same with our quesadillas. They’re actually built to hold their own. We have a special rolling technique that rolls it so tight that nothing is going to fall apart when you eat one of our burritos.”
Saraga said the company has aggressive expansion plans in place and it is looking to grow quickly.
“I think we really proved ourselves to the industry and to our franchisees during COVID in the way that we stepped up. When COVID hit, it hit our company the same it hit the rest of the world. Fast and furious,” he said. “Overnight we saw a 70 percent decrease in sales and our President and Founder Alex Shtein did five things that I think made a huge difference in our ability to succeed.
BARBURRITO WAIVED 100% OF FRANCHISEE ROYALTIES IN WAKE OF COVID-19
“The first thing we did is we waived 100 percent of our royalties to all franchisees and I think we’re the only franchisor in North America that actually waived 100 percent of royalties. Everybody else either deferred or reduced. Alex also set aside a quarter million dollars of his own cash as a relief fund to help support our most vulnerable stores. And that went a long way, especially with food court locations. The third that was done was getting on the phone with landlords across the country to renegotiate rents to help our franchisees to be successful. And I believe again we’re the only franchisor in Canada that did that on behalf of our franchisees. Most other franchisors told the franchisees to contact landlords themselves and negotiate their own deals. We took the bull by the horn to make sure that we spearheaded those deals.
“The fourth thing we did is our marketing team came up with a strategy of having corporations sponsor burritos being sent out to frontline health care workers and hospital staff and we matched donations up to $25,000 and sent out almost $70,000 of burritos during the height of COVID-19 to feed frontline health care workers and hospital staff. Lastly, we renegotiated our rates with Uber Eats, Skip The Dishes, and Door Dash and boosted our marketing spend and as a result our sales from last year throughout COVID remained flat. And now we’ve actually seen increases – double digit increases year-over-year from all those efforts.”
As a result of COVID, many restaurants are closing their doors permanently creating plenty of real estate opportunities. Saraga said barBurrito would like to take advantage of that and take over those spaces. The company is approaching bankruptcy trustees, landlords, and realtors on a regular basis. Trustees are an interesting way to get in before the space even hits the market. The company is also talking to other brands that might want to give up space.
The company focuses on power centre and grocery-anchored locations but also likes to be on university and hospital campuses.