Unlocking Growth: QDOBA Secures Additional Liquidity through Whole Business Securitization

QDOBA Restaurant Corporation, the leading fast-casual Mexican restaurant franchisor, has announced the successful completion of its inaugural $305 million whole business securitization. The securitization was carried out through Qdoba Funding LLC and is aimed at optimizing QDOBA's capital structure for ongoing growth while providing significant interest expense savings. The proceeds will be primarily used to refinance QDOBA's existing senior debt facilities and inject liquidity into general corporate initiatives, such as remodeling corporate restaurants and enhancing the customer experience through digital menu boards.

Following its acquisition by Butterfly Equity in 2022, QDOBA has undergone significant transformation, adopting an asset-light business model by refranchising a considerable portion of its 750 restaurants. This strategic shift has resulted in an impressive 6% positive systemwide same-store sales growth in fiscal year 2023, defying industry headwinds. To further bolster its growth trajectory, QDOBA recently appointed industry veterans John Cywinski as Chief Executive Officer and Prashant Budhale as Chief Technology Officer.

With these developments, QDOBA aims to solidify its position as the second-largest Mexican fast-casual brand in the United States. Under Cywinski's leadership, QDOBA plans to double its unit count to approximately 1,500 restaurants in the long term. The successful whole business securitization supports this ambitious growth plan and sets the stage for accelerated investment in the highly promising fast-casual Mexican sector.

Francesco D'Arcangelo, Principal at Butterfly Equity, expressed enthusiasm regarding the transaction, emphasizing QDOBA's potential to drive growth and evolution within the fast-casual Mexican industry. D'Arcangelo highlighted the significance of the securitization, not only as a financial milestone but also as a testament to Butterfly's unwavering conviction in QDOBA's capacity to succeed.

The closing of the securitization was made possible with the support of Barclays Capital Inc., acting as sole structuring advisor and sole bookrunner. Legal counsel was provided by Kirkland & Ellis LLP for QDOBA and Milbank LLP for Barclays.

About QDOBA

QDOBA is a fast-casual Mexican restaurant chain with 750 locations across the United States and Canada. The brand prides itself on delivering exceptional flavor through ingredients prepared in-house, by hand, and fresh throughout the day. QDOBA offers a variety of chef-crafted signature menu options while also allowing customers to customize their orders to suit their personal preferences. Renowned as the "Best Fast Casual Restaurant" in the USA TODAY 10Best Readers' Choice Awards for five consecutive years, QDOBA continues to elevate the dining experience for Mexican food enthusiasts. To learn more about QDOBA, visit www.QDOBA.com or download the QDOBA app from the Apple App Store or Google Play. Stay connected with QDOBA through Facebook, Instagram, TikTok, and YouTube.

About Butterfly Equity

Butterfly Equity is a private equity firm based in Los Angeles, California, specializing in investments within the food sector. The firm's focus spans the entire food value chain, covering upstream and processing, industry enablers, multi-site, and branded goods segments. With over $4 billion of assets under management, Butterfly's investment approach combines deep industry expertise, data-driven decision-making, and hands-on portfolio transformation to generate attractive returns. To find out more about Butterfly Equity, please visit www.bfly.com.

In conclusion, QDOBA's successful whole business securitization represents a pivotal moment for the fast-casual Mexican restaurant franchise. With enhanced liquidity and a solid capital structure, QDOBA is primed to accelerate its growth and cement its position as a dominant player in the industry. The future looks bright for QDOBA as it continues to captivate customers with its flavorful offerings and commitment to culinary excellence.