A locally based hospitality group signed a development agreement with Taco John’s to build at least 50 new restaurants by 2026, including “significant expansion” in West Michigan.
Grand Rapids-based Meritage Hospitality Group (OTCQX: MHGU) said Wednesday that under the terms of an area development agreement signed with Taco Johns, Meritage will build 50 new Taco John’s restaurants by March 31, 2026, with options to develop an additional 150 restaurants.
The agreement grants Meritage exclusive development rights to multiple states and provides for “significant economic incentives,” subject to the company fulfilling its development schedule. Meritage estimates it will invest approximately $100 million in the initial 50 store rollout through a combination of cash on hand and credit facilities.
“We are excited about this new partnership with Taco John’s and look forward to launching development in our home market of West Michigan with new store openings beginning in 2022,” said Gary Rose, president and COO of Meritage. “We were initially attracted to the brand by the made-to-order quality food, drive-thru service and significant new development opportunities, all of which align with our core competencies. Our first Taco John’s restaurant visit confirmed we would be excited to serve the food, including their delicious breakfast burritos and signature Potato Ole’s, and (we) knew this brand represented our core value of ‘we love what we do.’”
Established in Cheyenne, Wyoming, in 1969, Taco John’s is a Mexican quick-service chain that serves breakfast, lunch and dinner. With nearly 400 restaurants, the brand has undergone significant enhancements in the past few years, including a new executive management team and a rebranding campaign.
The Meritage multistate area development agreement is the largest development deal in Taco John’s history.
Meritage currently operates 345 restaurants across five brands: Wendy’s, Morning Belle, Stan’s Tacos, Twisted Rooster and Freighters. The company is the nation’s largest Wendy’s franchisee, and it began its restaurant development and operations expertise by purchasing 23 Wendy’s in 1998. The company has about 11,500 employees in 16 states. With this development agreement, Meritage estimates it will add as many as 1,250 employees.