Tortilla has acquired Fresh Burritos, the second largest fast casual Mexican restaurant group in Europe and largest in France, for €3.95m (£3.34m).
The strategic acquisition is the latest step forward in Tortilla’s ‘Vital Five’ growth strategy, which includes developing the brand internationally and doubling down on franchising.
The acquisition includes 13 company-owned leasehold restaurants in high-quality locations in Paris and other major French cities, as well as rights to the Fresh Burritos brand and network of 19 franchised locations. The 19 franchised locations are across metropolitan France including Corsica, with some in the French overseas department of Réunion Island and one in South Korea.
It will provide a springboard for Tortilla’s franchise growth across Europe, alongside compelling synergies for the enlarged group. These include a French central production kitchen, wider buying power, and operational and marketing efficiencies.
As the largest fast-casual Mexican group in the UK and Europe with 89 locations, Tortilla is more than twice the size of its nearest European compeititor and therefore poised to lead the growing burrito market in Europe, according to the group.
Fresh Burritos was acquired from FBH through a combination of cash payment and bank debt rollover. The deal is funded from Tortilla’s existing debt facilities and is expected to contribute £2.5m of additional annual adjusted EBITDA (pre-IFRS 16) at 24 months maturation.
A new Tortilla European sub-board committee has been created, chaired by group non-executive director Francesca Tiritiello, who was formerly Yum!’s European Franchise Division CFO.
She is joined by the newly appointed director of the sub-board committee, Giles Boehringer, who was the former VP of Development & Franchise for KFC France. An experienced European hospitality managing director has also been appointed and will join in September.
In a statement to the Stock Exchange today (25 June), Tortilla further added its core UK business is trading in line with the board’s full year expectations. The company will provide a market update on its H1 2024 performance in July.
Andy Naylor, CEO of Tortilla, commented: “Tortilla’s international ambitions are no secret, and acquiring Fresh Burritos is our gateway to mainland Europe. With Mexican cuisine surging in popularity, these prime French locations give us a solid launchpad. We’re set to leverage this acquisition, just in time for the Paris Olympics!
We’ve assembled a top-tier European team, with Francesca and Gilles at the helm, to navigate this new market. The brand synergies are clear, a new central kitchen is in the works, and our dedicated team is raring to go. We’re primed for sustainable growth abroad!”
Timothée Tronet, founder of Fresh Burritos, commented: “I started Fresh Burritos after returning home from a stint in America, where I fell in love with Mexican cuisine. Our brand was the first of its kind in France, offering quick and affordable, customisable Mexican-inspired dishes - similar to Brandon and Jen’s mission to bring burritos to the UK.
“I have long admired Tortilla and couldn’t think of a better brand to partner with to take the French business to the next level. As well as their passion for the product and our category, Tortilla’s operational model and scale will be an incredible asset to our franchisees. There is great enthusiasm in France and Europe in general for Mexican food, and Tortilla is the best positioned to take advantage of the market trends.”
