Dive Brief:
- Torchy’s Tacos is closing a “limited number of locations that no longer align” with its long-term plans, a Torchy’s Taco spokesperson said in a statement emailed to Restaurant Dive.
- Torchy’s didn’t say how many units it will close, but local media reports highlight at least six closures. Its only Georgia restaurant will close on Feb. 4. It will also exit the Columbus, Ohio, market following two closures — it closed a third location last August. Two restaurants in Central Florida as well as a unit in Arizona will close next week. The company also closed six restaurants last year, according to several local news reports.
- These closures will help Torchy’s focus more on high-performing markets and improve the guest experience, the spokesperson said.
Dive Insight:
After years of rapid unit growth in the restaurant industry, many chains including Salad and Go, Peet’s Coffee, Starbucks and Wendy’s, are intentionally slowing down growth or closing units to improve the overall health of the system.
Experts have told Restaurant Dive that the industry is overbuilt, especially in the South and Southeast, making sustainable store growth difficult. Many chains rushed into these markets expecting high growth opportunities, but supply and demand imbalance is hindering those chances, R.J. Hottovy, head of analytical research at Placer. Ai, said during the ICR Conference.
“There’s going to be a lot of chains that end up pulling out of those markets,” Hottovy said. “Your 50-unit chains when they move to new markets in the Southeast, … the visit trends are way below the national average. So I suspect that’s just hard when we look at the number of visits compared to the number of restaurants that have opened up in the market.”
Torchy’s said it had 125 units as of Jan. 7 in a press release about its 20th anniversary. The latest closures will bring the chain under 120 units. It is still opening new units and plans to do so in Zionville, Indiana, next week, according to the brand’s social media accounts.
“At Torchy’s, we’ve always believed that growing the right way matters more than growing fast,” the spokesperson said. “We’re confident these moves will put us in the strongest position for sustainable growth moving forward.”
The fast casual chain brought on new leadership last February with the appointment of Paul Macaluso as CEO. He was hired to oversee the chain’s next phase of growth, which likely included evaluating its existing portfolio. Not long after he started, Torchy’s closed a handful of restaurants. That chain of events is similar to Salad and Go, which brought on a new CEO, Mike Tattersfield, last year, who recently oversaw the chain’s pullout in Texas and Oklahoma to focus on more successful regions in Arizona and Nevada.
