Montreal-based Foodtastic, one of Canada’s largest restaurant companies, is continuing its rapid growth as it moves closer to its goal of $1 billion in system sales by the end of 2023.
It has entered into an agreement to buy Quesada Burritos & Tacos with about 175 locations across eight provinces.
The acquisition will increase Foodtastic’s portfolio to 22 different brands, more than 900 restaurants and $830 million in sales.
“Quesada is one of the largest Quick Service Restaurant brands in the country, and we are happy to welcome this fast-growing brand into the Foodtastic family,” said Peter Mammas, President and CEO of Foodtastic. “We look forward to working with all our new franchisees and expanding the brand in Canada.”
He said Mexican food is a fast growing segment of the industry.
“Ourselves as a company we’re continuously looking to expand the company into areas we’re not in,” added Mammas. “So Mexican was one of them. There’s some other stuff like Asian, breakfast, hamburgers, that we would want to get into. Quick service pizza as well.
“We’re constantly going to be looking to grow the company through acquisition and new areas we’re not in. Quesada has been around for years. It’s proven. It’s growing. They opened close to 15 new stores in the last year, 18 months. The brand’s great.
“Honestly it came about because my son was always going to eat there. He came to me and said hey dad we should buy this place. It led to me calling the owners and making a deal.”
Quesada, which was founded in 2004, has grown quickly and Foodtastic plans to continue developing the brand, with more than 50 new locations expected to open over the next 36 months.
Foodtastic, which was founded in 2016, has several well-known brands including Second Cup, Pita Pit, Milestones, Fionn McCool’s, Shoeless Joe’s, Au Coq, La Belle et La Boeuf, and Monza.
“We are extraordinarily proud of our franchisee partners, front line workers and corporate team. With their support, we have grown Quesada from a single store into +175 locations across eight provinces. We are excited about the future of the brand and believe that as part of Foodtastic our franchisees will reach new levels of success,” said Steve Gill, Founder and CEO of Quesada.
Mammas said Foodtastic acquires brands that it thinks it could fix or brands it thinks it can grow.
“Sometimes we’re actually doubly lucky in the sense that we can fix it and grow it. And obviously when we’re buying brands we can fix the multiples are smaller, are less, because brands that are going well and expanding for sure the multiples are higher. We look at both,” he said.
Mammas and his brother Lawrence have been in the restaurant business since their youth. In 1990, Lawrence came up with a concept called Nickels Deli with a local Quebec singer, who is now an international diva, Celine Dion. Together with Dion and her husband, René Angélil, and his cousin Paul Sara, the Mammas brothers started Nickels.
Beauty and the Beef started in 2012 with another partner, Jack Gaspo. Then they started Souvlaki Bar and then it purchased Carlos & Pepe’s and continued its expansion. In late 2018, they signed a partnership with Oaktree Capital, an investment firm out of the U.S., to help it continue its expansion and they acquired several brands.
In 2016, Foodtastic did about $20 million in system sales and started making acquisitions. Then COVID hit. Pre-COVID the company was doing about $100 million in system sales.
“When COVID hit our sales dropped by 85 per cent within I’d say 14 days but we kind of talked through it, we adjusted our system, we went on third-party delivery right away, we did whatever we could for the existing franchisees but we also realized and made the decision that COVID is going to go away one day and there’s no better time to do acquisitions than now.
“For the next 24 months, we went on a complete buying spree and we bought close to 12 brands and we went from $100 million pre-COVID and we’re going to be at $1 billion in sales in Canada by spring next year.”