The investors known for their role in the breakout success of Dave’s Hot Chicken are now placing a significant bet on the rapidly growing culinary trend of birria. Mike’s Red Tacos, a San Diego-based chain specializing in birria, is set to announce an ambitious franchising initiative intending to roll out hundreds of locations across the United States this week. The initiative is backed by early-stage investors Bill Phelps and Andrew Feghali, although specific financial details of their investment, which occurred in early 2025, remain undisclosed.
Phelps emphasized the brand’s potential, stating, “We just saw that this was a brand and a concept that really had legs to it.” He highlighted the importance of getting feedback from prospective franchisees, noting that the response was overwhelmingly positive. Before being introduced to the concept by Feghali, Phelps admitted he was unfamiliar with birria.
Traditionally, birria is a flavor-rich beef or goat stew, slow-cooked with an array of spices and chiles. The iconic birria tacos served at Mike’s use this tender, slow-cooked meat and often come with a consomme for dipping, enhancing the dining experience. Datassential reports that while birria was once a niche item, it now appears on approximately 3.7% of U.S. menus—a significant increase from just four years ago. Despite this growth, there is still ample opportunity for expansion as it has yet to become ubiquitous.
The rising trend has attracted attention from various fast-food chains. Major Mexican-inspired brands like Qdoba, El Pollo Loco, Del Taco, and Taco Bell now offer their versions of birria. Additionally, there are at least 478 operators currently running birria-focused establishments in the country.
Mike’s Red Tacos features a diverse menu, including burritos, loaded nachos, fries, and even birria ramen, catering to a wide array of customers. Phelps pointed out that the restaurant attracts not only millennials and Gen Zs but also older patrons and families, underscoring its broad appeal.
Phelps has a rich history in the restaurant industry, having co-founded Wetzel’s Pretzels in 1994 and played a key role in Blaze Pizza’s growth. He joined Dave’s Hot Chicken in 2019 as an investor and CEO, helping the brand expand rapidly through franchising. In a significant move last year, Roark Capital, a private equity firm, acquired a majority stake in Dave’s Hot Chicken for about $1 billion.
Feghali, who was among the first franchisees at Dave’s Hot Chicken and is also a prominent Little Caesars operator, collaborates with Phelps as co-founder of Four Wall Partners, a venture focused on restaurant franchising investments. They plan to leverage their experience as both early-stage investors and board advisors for Mike’s Red Tacos. Vincent Montanelli, previously the CEO of Wetzel’s, has been appointed as the new president of Mike’s.
Beginning as a food truck five years ago, Mike’s Red Tacos launched its first sit-down location in 2022. Founder Mike Touma is laser-focused on expansion; he intends to open a third location by March and will remain involved as both board member and franchisee for the San Diego spots.
The new leadership has crafted a deal that allows Touma to retain rights to his existing and future locations in San Diego while the franchising initiative spreads Mike’s concept across the U.S. and potentially internationally. Phelps articulated a clear approach: “We’re going to be very aggressive with this growth because we’ve seen that we can do that.”
To date, Mike’s Red Tacos has secured development agreements with multi-unit operators for over 200 locations across the nation, spanning from California to Texas and up to New England. Some franchises are expected to debut as early as the end of this year. While Phelps foresees substantial competition from established national chains and local taco businesses, he remains confident that the combination of a straightforward menu, delicious offerings, and a strong marketing strategy will position Mike’s for success in the culinary landscape. “We think this can be a winner,” he said.
