FRP kicks off sale process for Mexican chain El Mexicana
Consultants from FRP Advisory have been selected to manage the sale of popular Mexican restaurant chain El Mexicana. The move follows a successful year for the business during which it announced plans to open up to four new sites and a further 25 by 2027.
Founded in 2011 by former Sainsbury’s exec John Coverley, El Mexicana is a provider of Mexican-inspired grab-and-go meals including burritos and quesadillas. Through its Don Churro dessert brand, it also offers freshly made churros and other sweet treats, with all food at its nine existing sites prepared daily in its Stevenage-based Central Kitchen.
The group has a current annual turnover of £5 million. However, it has not always been trading as well. In 2023, the firm had to be bought out of administration by its original owners, after the chain declared its brands had suffered thanks to rising food costs and challenging market conditions due to the Covid-19 pandemic.
A pre-pack deal brokered by administrators from Interpath Advisory saw Coverley and Paul Stagg take control of the entity – in a move that saved 92 jobs. In the time since, the firm has committed to building on its freshly-secured fundamentals, and in 2024 announced plans to open 25 new sites in the coming three years. But to do that, El Mexicana will need investment. To that end, a team from FRP Advisory has been appointed to explore options with potential buyers and investors.
On the potential opportunity for partners, Stagg said, “We have transformed our business in the last 12 months from a franchise model to fully owning all stores while investing in a state-of-the-art central kitchen. This gives us, and any partner, capacity to grow more than three-fold from our existing overhead base, with an existing pipeline of new stores opening in the coming months set to further drive increased profitability.”
Led by partner Chris Adlam and director Alex Patey, the consultants will oversee the process of finding an investment partner to support rapid geographical expansion – with possible plans understood to include utilising the Central Kitchen to rapidly expand the El Mexicana and Don Churro brands as well as examining the potential to service other brands.
Adlam commented, “In recent years we’ve seen a surge in popularity for fast food brands that can offer healthy alternatives at a reasonable price. El Mexicana and Don Churros’ commitment to using only the freshest ingredients, combined with its established Central Kitchen and logistics operation, mean the business is uniquely placed to capitalise on this trend and continue its rapid growth.”
