Food service establishment barBurrito, which began with its first location in 2006 in Toronto, has grown to 158 restaurants today with plans for massive expansion across the country.
Shawn Saraga, VP of Global Development for barBurrito Restaurants Inc., said another 15 locations are currently under construction and 80 more on the way that are already signed with paper ready to go in the Canadian market.
President and Founder Alex Shtein started to franchise the business in 2009 and it has taken off since then.
The brand has also opened one location in the US and another four are currently under construction. It is in the process of developing opportunities in New Jersey, New York, Florida, California and Delaware. The first location in the US was in Howell, Michigan, in August 2020.
Saraga said the company expects to open 51 new locations in Canada this year and another six in the US.
He said the Canadian market could eventually grow to 400 to 500 locations. The US market could be more.
“It’s based on finding the right locations. For us what matters more than the speed of opening is finding the best locations. So if it isn’t the best location we’d rather not do it,” explained Saraga.
“We’re looking for 1,000 to 1,300 square feet of space in grocery-anchored shopping centres, Walmart and Costco style power centres. We like lots of parking, lots of visibility and lots of frontage. With us what matters is we’re looking for a population base of anywhere from 15,000 to 30,000 people (in the trading area). I will say the small towns have done incredibly well for us. We’re doing great numbers in small towns because of the lack of competition that exists there and our ability to get a first to market position.
“If there’s any market we’re targeting this year it would definitely be Montreal for growth. We’re very interested in the Montreal marketplace right now and the Greater Montreal Area. That is an untapped region for us and we’ve already confirmed our first location to be opening up in the Montreal area in Mont Royal and we’re about to secure our second location and are very actively looking for people that want to help us expand in the Greater Montreal Area.”
Saraga said the company’s target for growth is also the Vancouver market with about 16 new stores opening this year in the Greater Vancouver Area.
Before the pandemic hit, the lowest sales in the chain were about $400,000 a year with the highest $1.6 million. When the pandemic hit, Shtein, the founder, took immediate action to help support the franchisees.
The first thing he did was waive 100 per cent of royalties to all stores. For traditional stores they were waived for nine weeks and for non-traditional food court locations it was 22 weeks, giving up about $1 million in revenue to help the stores succeed.
Shtein also set aside about $250,000 of his own cash as a relief fund to help support the most vulnerable stores.
“After that we got on the phone with landlords across the country and personally re-negotiated the rents and got the CECRA (Canadian Emergency Commercial Rent Assistance) in place for all of our locations and we were successful in 99 per cent of the cases,” said Saraga.
The brand also connected with corporations to sponsor burritos and bowls that were sent out to frontline health care workers during the height of the pandemic. More than $70,000 worth of food was sent out.
The company also renegotiated rates with Uber Eats, Skip The Dishes and Door Dash, reducing rates and boosting marketing.
“As a result, through April, May and June of 2020, our sales were flat. We saw no decrease at all,” explained Saraga. “In fact, for the rest of 2020 all through 2021 and now coming into 2022 our sales have been up 15 to 20 per cent. So now our highest sales in the chain are $2.2 million. Our lowest are still at $400,000 because those are the food courts that are struggling during COVID. And our average store sales are between $600,000 to $650,000 a year.”
Saraga said the quality of the product is excellent, adding that barBurrito has the highest Yelp reviews in the industry.
“We offer more proteins and more healthy food options than any of our competitors. We’re perfectly priced in the $10 meal category with the average guest’s check coming in at $16.55. We offer phenomenal support to our franchisees. We’ve ensured that they weathered the storm of COVID extremely well to the point now that 40 per cent of our franchisees own more than one unit. And we’re continuously growing and innovating and improving the brand,” he said.