{"id":19919,"date":"2026-02-17T16:04:38","date_gmt":"2026-02-17T16:04:38","guid":{"rendered":"https:\/\/readtrends.com\/en\/mikes-red-tacos-birria-franchise\/"},"modified":"2026-02-17T16:04:38","modified_gmt":"2026-02-17T16:04:38","slug":"mikes-red-tacos-birria-franchise","status":"publish","type":"post","link":"https:\/\/readtrends.com\/en\/mikes-red-tacos-birria-franchise\/","title":{"rendered":"Dave&#8217;s Hot Chicken investors bet on birria with national franchise expansion plan &#8211; CNBC"},"content":{"rendered":"<article>\n<p><strong>Lead:<\/strong> Investors behind Dave&#8217;s Hot Chicken are moving to scale birria nationally by backing Mike&#8217;s Red Tacos, a San Diego chain known for birria tacos. The backers \u2014 Bill Phelps and Andrew Feghali \u2014 made an early-2025 investment and will support a new franchising push to build hundreds of outlets across the U.S. Mike&#8217;s, founded as a food truck five years ago, opened its first brick-and-mortar in 2022 and plans a third San Diego location in March 2026; the deal keeps founder Mike Touma as a local franchisee and board member. The effort aims to turn a regional specialty into a broad national concept while facing competition from legacy chains and local operators.<\/p>\n<h2>Key Takeaways<\/h2>\n<ul>\n<li>Mike&#8217;s Red Tacos, based in San Diego, has two operational locations and will announce a franchising program to scale nationwide.<\/li>\n<li>Bill Phelps and Andrew Feghali invested in early 2025 and will serve as advisors and board members for Mike&#8217;s expansion.<\/li>\n<li>Datassential reports birria appears on 3.7% of U.S. menus, more than four times its penetration four years ago, signaling rapid growth but not ubiquity.<\/li>\n<li>Mike&#8217;s menu includes birria tacos, burritos, loaded nachos, fries and birria ramen, broadening appeal beyond trend-driven diners.<\/li>\n<li>The chain has secured development deals with multi-unit operators for more than 200 franchise locations spanning California, Texas and New England.<\/li>\n<li>Vincent Montanelli has joined Mike&#8217;s as president; Mike Touma will retain rights to San Diego stores and remain a franchisee and board member.<\/li>\n<li>Phelps and Feghali helped scale Dave&#8217;s Hot Chicken via franchising; Roark Capital bought a majority stake in Dave&#8217;s for roughly $1 billion in 2025, illustrating investor appetite for fast-casual rollouts.<\/li>\n<\/ul>\n<h2>Background<\/h2>\n<p>Birria is a traditional Mexican stew\u2014typically beef or goat\u2014slow-cooked with chiles and spices; birria tacos use that shredded meat as filling and often come with a consom\u00e9 for dipping. Once concentrated regionally, birria entered U.S. mainstream menus through street vendors, pop-ups and fast-casual concepts, fueling a wider industry interest in modular, shareable Mexican formats.<\/p>\n<p>Bill Phelps co-founded Wetzel&#8217;s Pretzels in 1994 and was an early investor in Blaze Pizza; he later invested in and led Dave&#8217;s Hot Chicken as it scaled by franchising. Andrew Feghali was an early Dave&#8217;s franchisee and is a major Little Caesars operator; together they formed Four Wall Partners, a franchising investment firm focused on rapid rollouts. Their track record provides the operational playbook they plan to apply to Mike&#8217;s Red Tacos.<\/p>\n<h2>Main Event<\/h2>\n<p>On Tuesday, Mike&#8217;s Red Tacos is set to reveal a national franchising initiative supported by Phelps and Feghali. The funding round closed in early 2025, though financial terms were not disclosed. The plan calls for recruiting franchisees and leveraging multi-unit operators to deliver more than 200 development commitments already across multiple U.S. regions.<\/p>\n<p>Vincent Montanelli, previously CEO of Wetzel&#8217;s, has been hired as Mike&#8217;s president to oversee operations and the franchise rollout. Founder Mike Touma will retain the rights to his San Diego stores, remain on the company board and act as a franchisee for the brand&#8217;s hometown locations. The team says the model mirrors the one used to scale Wetzel&#8217;s and Dave&#8217;s Hot Chicken rapidly through franchising.<\/p>\n<p>Phelps described taking prospective franchisees to Mike&#8217;s as a critical validation step, saying the visits produced strong interest. He also noted that birria&#8217;s appeal at Mike&#8217;s stretches beyond younger demographics to families and older customers, which the team views as a growth advantage. Some franchised units could open as soon as late 2026, according to the company, though timelines will depend on buildouts and operator readiness.<\/p>\n<h2>Analysis &#038; Implications<\/h2>\n<p>The move represents a common evolution: investors who succeeded scaling one concept seek the next category ride. Franchising reduces capital intensity for the parent company and accelerates footprint growth when multi-unit operators are engaged early, but it also shifts execution risk to franchise partners. For Mike&#8217;s, locking multi-unit commitments for 200-plus locations signals strong initial demand from operators who want to capture birria&#8217;s momentum.<\/p>\n<p>Market data show opportunity and risk. Datassential&#8217;s 3.7% menu penetration means birria is still far from restaurant ubiquity, leaving room for chains to expand. At the same time, major Mexican-inspired chains (Qdoba, El Pollo Loco, Del Taco, Taco Bell) have rolled out birria variants, and dozens of local operators specialize in birria, creating a crowded, competitive landscape.<\/p>\n<p>Menu simplicity could be an advantage: Mike&#8217;s concise lineup\u2014focused on tacos, burritos and a few signature items\u2014helps streamline training, supply chains and unit economics, which franchisors emphasize when selling territories to operators. However, maintaining recipe consistency and quality across a fast franchise expansion will be critical to preserve the brand&#8217;s appeal and avoid dilution.<\/p>\n<h2>Comparison &#038; Data<\/h2>\n<figure>\n<table>\n<thead>\n<tr>\n<th>Metric<\/th>\n<th>Value<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>U.S. menu penetration (birria)<\/td>\n<td>3.7% (Datassential)<\/td>\n<\/tr>\n<tr>\n<td>Operators focused on birria<\/td>\n<td>Approximately 478 (Datassential)<\/td>\n<\/tr>\n<tr>\n<td>Committed franchise development deals for Mike&#8217;s<\/td>\n<td>More than 200 locations (company disclosure)<\/td>\n<\/tr>\n<tr>\n<td>Dave&#8217;s Hot Chicken majority sale<\/td>\n<td>~$1 billion to Roark Capital (2025)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p>The table contrasts birria&#8217;s current footprint and specialist operators with Mike&#8217;s stated development pipeline and an example of a comparable fast-casual exit. While menu penetration has climbed quickly\u2014roughly quadrupling over four years\u2014it remains a small slice of total menus, implying both runway for growth and time pressure to secure market share before larger chains scale competing offers.<\/p>\n<h2>Reactions &#038; Quotes<\/h2>\n<p>Company leaders framed the move as a validated concept with broad appeal.<\/p>\n<blockquote>\n<p>&#8220;We just saw that this was a brand and a concept that really had legs to it,&#8221;<\/p>\n<p><cite>Bill Phelps, investor and Four Wall Partners co-founder<\/cite><\/p><\/blockquote>\n<p>Phelps described touring prospective franchisees through Mike&#8217;s as a decisive step in securing operator buy-in.<\/p>\n<blockquote>\n<p>&#8220;Everyone gave it the thumbs up,&#8221;<\/p>\n<p><cite>Bill Phelps<\/cite><\/p><\/blockquote>\n<p>The founder emphasized continuity in the brand&#8217;s San Diego roots while enabling national growth.<\/p>\n<blockquote>\n<p>&#8220;We put together a deal where [Touma is] going to keep the rights to his stores and future stores in San Diego,&#8221;<\/p>\n<p><cite>Bill Phelps, describing the agreement with Mike Touma<\/cite><\/p><\/blockquote>\n<h2>\n<aside>\n<details>\n<summary>Explainer: What is birria?<\/summary>\n<p>Birria is a Mexican stew traditionally made from goat or beef, slow-cooked with dried chiles and spices until the meat is tender and richly flavored. When used in tacos, the shredded meat is placed in tortillas and often served with a consomm\u00e9\u2014a broth made during cooking\u2014for dipping. The recent U.S. trend adapts birria into compact, fast-casual formats and hybrid dishes (e.g., birria ramen), enabling operators to pair authenticity with scalable kitchen techniques. For franchisors, consistency of slow-cooked flavor is achieved via standardized braising procedures, centralized supplies or prepared protein shipments to ensure quality at scale.<\/p>\n<\/details>\n<\/aside>\n<\/h2>\n<h2>Unconfirmed<\/h2>\n<ul>\n<li>Exact financial terms of the early-2025 investment by Phelps and Feghali have not been disclosed publicly.<\/li>\n<li>Timelines for opening the first wave of franchised Mike&#8217;s locations remain tentative; company guidance says some sites could open by late 2026 but precise dates depend on operator approvals and buildouts.<\/li>\n<li>The depth and exclusivity of the 200-plus development deals (e.g., whether they are binding versus letters of intent) have not been fully documented in public filings.<\/li>\n<\/ul>\n<h2>Bottom Line<\/h2>\n<p>Investors who helped scale Dave&#8217;s Hot Chicken are betting that birria can be the next fast-casual category to support a national franchising play. Mike&#8217;s Red Tacos brings a compact menu and early operator interest, plus leadership with franchising experience\u2014ingredients that can accelerate rollout if execution holds.<\/p>\n<p>Yet the path is competitive: national chains have introduced birria items, nearly 500 specialist operators exist, and rapid franchising requires rigorous quality control, supply-chain management and franchisee training. For consumers and potential franchisees, the next 12\u201324 months will reveal whether Mike&#8217;s can convert early momentum into durable market share.<\/p>\n<h2>Sources<\/h2>\n<ul>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/02\/17\/daves-hot-chicken-investors-bet-on-birria-with-new-deal.html\" target=\"_blank\" rel=\"noopener\">CNBC<\/a> (news report)<\/li>\n<li><a href=\"https:\/\/www.datassential.com\/\" target=\"_blank\" rel=\"noopener\">Datassential<\/a> (market research on menu penetration and operators)<\/li>\n<li><a href=\"https:\/\/www.roarkcapital.com\/\" target=\"_blank\" rel=\"noopener\">Roark Capital<\/a> (private equity firm disclosure on investments)<\/li>\n<\/ul>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>Lead: Investors behind Dave&#8217;s Hot Chicken are moving to scale birria nationally by backing Mike&#8217;s Red Tacos, a San Diego chain known for birria tacos. The backers \u2014 Bill Phelps and Andrew Feghali \u2014 made an early-2025 investment and will support a new franchising push to build hundreds of outlets across the U.S. Mike&#8217;s, founded &#8230; <a title=\"Dave&#8217;s Hot Chicken investors bet on birria with national franchise expansion plan &#8211; CNBC\" class=\"read-more\" href=\"https:\/\/readtrends.com\/en\/mikes-red-tacos-birria-franchise\/\" aria-label=\"Read more about Dave&#8217;s Hot Chicken investors bet on birria with national franchise expansion plan &#8211; CNBC\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":19918,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_title":"Dave's Hot Chicken investors back birria chain \u2014 Insight","rank_math_description":"Investors Bill Phelps and Andrew Feghali backed San Diego's Mike's Red Tacos in early 2025 and plan a national franchising push for hundreds of birria restaurants, leveraging veteran franchising playbooks.","rank_math_focus_keyword":"mikes red tacos,birria,franchising,Bill Phelps,Andrew Feghali","footnotes":""},"categories":[2],"tags":[],"class_list":["post-19919","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-top-stories"],"_links":{"self":[{"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/posts\/19919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/comments?post=19919"}],"version-history":[{"count":0,"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/posts\/19919\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/media\/19918"}],"wp:attachment":[{"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/media?parent=19919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/categories?post=19919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/readtrends.com\/en\/wp-json\/wp\/v2\/tags?post=19919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}