San Diego Taco Chain Plans National Franchise
A small San Diego-based taco chain is finalizing plans to expand across the U.S. through franchising. The move comes as the fast-casual sector sees a shakeup, with operators betting on the continued appeal of affordable and customizable formats.
The San Diego chain is Mike's Red Tacos, a brand specializing in beef birria that started as a food truck in 2021. Founder Mike Touma will be opening his third location in the city in March, building on the local following that saw the brand named a "Yelp Top 100 U.S. Restaurant" in 2023. The national expansion is being fueled by an investment group led by industry veterans with a history of scaling franchise brands. Key figures include Bill Phelps, a co-founder of Wetzel's Pretzels who also led Dave's Hot Chicken's growth, and Andrew Feghali, the first franchisee of Dave's Hot Chicken. Vincent Montanelli, who previously spent nearly two decades in leadership at Wetzel's Pretzels, has been appointed as the new company president to spearhead the growth phase. The team is banking on the continued popularity of birria, which was one of the most ordered food items in 2024. The expansion plan for Mike's Red Tacos already includes development agreements for more than 200 locations. These commitments come from experienced multi-unit franchisees of established brands like Jersey Mike's, Blaze Pizza, Dunkin', and Little Caesars. This move comes as the broader restaurant industry is projected to reach $1.55 trillion in sales in 2026, though operators face headwinds from higher food and labor costs. The fast-casual market specifically is valued at $169.3 billion in 2025 and is projected to grow significantly. The strategy leans into a resilient off-premises dining trend, which now accounts for more than half of the average restaurant's traffic. While some diners are trading down to fast food to save money, the fast-casual sector has seen a 15.5% net unit growth since 2022, far outpacing other dining segments. Expansion markets for the new franchises are slated to include Texas, Arizona, Nevada, Virginia, Michigan, and New England, among others. The rapid franchise development model mirrors the explosive growth seen by Dave's Hot Chicken, which launched in a Los Angeles parking lot in 2017 and sold for $1 billion in 2025.
