San Diego, Calif. — The minds behind the hot restaurant sensation Dave’s Hot Chicken are now betting on birria, a traditional Mexican dish, as the next big culinary trend in America. Mike’s Red Tacos, a nascent birria chain with its roots in San Diego, aims to expand significantly across the country and is set to unveil a franchising initiative aimed at establishing hundreds of locations nationwide.

In a strategic move supported by early-stage investors Bill Phelps and Andrew Feghali, Mike’s Red Tacos plans to grow from its two existing locations. Although specific financial details of the backing were not disclosed, Phelps expressed confidence in the brand’s potential, stating that the initial reception from prospective franchisees has been overwhelmingly positive.

Birria, a savory beef or goat stew traditionally seasoned with spices and chilies, has evolved into a popular taco filling, often served with consomme for dipping. Once a regional specialty, birria is now found on about 3.7% of menus across the U.S., a significant increase from just a few years ago. This surge in popularity indicates growing consumer interest, although widespread availability remains a work in progress.

A variety of fast-food chains, including Taco Bell and Del Taco, have recently added their own versions of birria to their menus, adding to a competitive landscape where approximately 478 restaurants focus solely on this dish. In addition to birria tacos, Mike’s Red Tacos offers a range of items, including burritos and loaded nachos, appealing to a diverse customer base.

Phelps noted that the chain attracts a wide demographic. “It’s not just millennials and Gen Zs; you’ll see families and older patrons in our restaurants,” he said. This broad appeal could serve as a significant advantage in a competitive marketplace.

Phelps, a co-founder of Wetzel’s Pretzels and an early investor in Blaze Pizza, joined Dave’s Hot Chicken as CEO in 2019. Under his leadership, the chicken chain expanded rapidly through franchising, culminating in a substantial investment from private equity firm Roark Capital last year. His experience positions him well to guide Mike’s Red Tacos through its upcoming expansion.

Feghali, who has a strong track record as one of the largest operators of Little Caesars and was among the first franchisees for Dave’s Hot Chicken, will also play a pivotal role. Together, he and Phelps established Four Wall Partners, a firm dedicated to investing in restaurant franchises. They plan to provide guidance and advisory support for Mike’s Red Tacos as it scales nationally.

Mike’s Red Tacos began as a food truck five years ago and opened its first brick-and-mortar restaurant in 2022. Founder Mike Touma will remain involved with the brand as a board member and franchisee as the chain extends its reach. The agreement allows him to maintain rights over his San Diego locations while the broader franchising effort takes shape.

The development team aims to replicate the successful growth strategies employed by Wetzel’s and Dave’s. Phelps indicated a commitment to aggressive expansion, with plans already in place for over 200 franchised locations stretching from California to New England, some of which could be operational by the end of the year.

Though the road ahead may be challenging, Phelps remains optimistic. He acknowledged strong competition from national chains and local establishments but believes that a straightforward menu, high-quality food, and impactful marketing tactics will differentiate Mike’s Red Tacos from its rivals.

“We envision this brand as a winner,” Phelps remarked, highlighting the burgeoning potential of birria in the American dining scene.