Gen-Z, Millennial Opps: Taco Cabana to be acquired amid drop in spend

Fiesta Restaurant Group is selling its Taco Cabana (TC) restaurant brand to Jack in the Box franchisee affiliate YTC Enterprises for $85m. This sale will cover TC's current $74.6m debt, and is expected to finalize in Q3 2021. Right now, it operates 142 restaurants in TX and six in NM.

Fiesta will reportedly focus wholly on Pollo Tropical, Inc.'s growth now that this is its main brand.

When the deal closes, I expect TC's spend to rise considering it will have more financial backing.

Per Pathmatics, the brand has spent roughly $27.6k on digital ads YTD, only approximately a quarter of the roughly $116.7k it had spent by this point last year. TC's estimated full-year 2020 spend of $434.1k reached around 4x of that of $112.4k in 2019. So far this year, it has earned ~5.3m digital impressions via desktop video (48%), desktop display (44%) and mobile display (8%) ads. This year's desktop video ads have been YouTube videos (64%) and Twitch videos (36%).

TC is currently targeting Gen-Z and millennials (male skew), so it may expand into additional digital channels in the future. As I briefly mentioned, its spend should pick back up after the deal closes and it rids itself of its debt. According to Kantar data, TC also invests in OOH and local broadcast. I expect you'll additionally benefit from offering localized ad space in and around TX and NM.

Agency & martech readers - Under new ownership, the brand's roster certainly may shift. Keep TC on your radar for future work.