Chuy's Holdings, Inc. (Chuy's) is a full-service restaurant concept offering a distinct menu of authentic, freshly-prepared Mexican and Tex-Mex inspired food.
The company operates various restaurants across 16 states. The company is committed to providing value to its customers through offering generous portions of made-from-scratch, flavorful Mexican and Tex-Mex inspired dishes.
The company offers the same menu for both lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, co...
Chuy's Holdings, Inc. (Chuy's) is a full-service restaurant concept offering a distinct menu of authentic, freshly-prepared Mexican and Tex-Mex inspired food.
The company operates various restaurants across 16 states. The company is committed to providing value to its customers through offering generous portions of made-from-scratch, flavorful Mexican and Tex-Mex inspired dishes.
The company offers the same menu for both lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and salads complemented by a variety of appetizers and desserts. Each of the company's restaurants also offers a variety of homemade sauces, including the company's signature Hatch Green Chile, Boom-Boom and Creamy Jalapeño sauces, all of which the company makes from scratch daily in each restaurant. These sauces are a key element of the company's offering and provide the company's customers with an added ability to customize their orders.
During 2022, the company launched its Chuy's Knock Out ('CKO') limited-time food offerings. The CKO food offerings run for six weeks once every quarter and showcases three new menu items. The company also offers a full-service bar in all of its restaurants providing the company's customers a wide variety of beverage offerings, featuring a selection of specialty cocktails including the company's signature on-the-rocks margaritas made with fresh, hand-squeezed lime juice and the King's Punch, a made-to-order, hand-shaken rum cocktail served in the company's signature shaker. The bar represents an important aspect of the company's concept, where customers frequently gather prior to being seated.
The company strives to create a unique and memorable customer experience at each of the company's locations. While the layout in each of the company's restaurants varies, the company maintains distinguishable elements across its locations, including hand-carved, hand-painted wooden fish imported from Mexico, a variety of vibrant Mexican folk art, vintage hubcaps hanging from the ceiling, colorful hand-made floor and wall tile and festive metal palm trees. Excluding patio space, the company's restaurants range in size from 4,700 to 9,900 square feet, with seating for approximately 200 to 400 customers. Nearly all of the company's restaurants feature outdoor patios. The company designs its restaurants to have flexible seating arrangements that allow the company to cater to families and parties of all sizes.
The company's brand strategy of having an 'unchained' look and feel allows its restaurants to establish their own identity and provides the company with a flexible real estate model. The company's site selection process is focused on conversions of existing restaurants, as well as new ground-up prototypes in select locations. The company's restaurants are open for lunch and dinner seven days a week. The company serves approximately 4,600 customers per location per week or 239,000 customers per location per year, on average, by providing high-quality, freshly prepared food at a competitive price point.
Business Strategies
The company's strategies are to pursue new restaurant development; deliver consistent comparable restaurant sales through providing high-quality food and service; and leverage the company's infrastructure.
Real Estate
The company leases various locations, of which some are free-standing restaurants, some are end-cap or in-line restaurants in Class A locations. The company also owns various properties with a free-standing restaurant in Indiana, Oklahoma, Arkansas and Texas. End-cap restaurants are highly visible locations at one of the ends of a retail development whereas in-line restaurants are locations that are between multiple retail locations within a development. Class A locations are upscale properties with easily identifiable locations and convenient access that are surrounded by other upscale properties. Excluding patio space, the company's restaurants range in size from approximately 4,700 to 9,900 square feet, averaging approximately 7,400 square feet with seating capacity for approximately 200 to 400 customers. Nearly all of the company's restaurants feature outdoor patios averaging approximately 1,000 square feet. Typically, the initial terms of the company's leases are 10 or 15 years in length with two to three, five-year extension options. The initial terms of the company's leases expire between 2025 and 2039. The company is also generally obligated to pay certain real estate taxes, insurance, common area maintenance charges and various other expenses related to the properties.
New Restaurant Development
The company is well-positioned to continue its growth through its new restaurant pipeline, which includes locations under development.
Sourcing and Supply
The company relies on one national distributor, Performance Food Group ('PFG'), and various other suppliers to provide the company's beef, cheese, beans, soybean oil, beverages and the company's groceries. The company's national distributor makes deliveries to each restaurant two to three times each week. The company's distributor relationship with PFG has been in place for approximately ten years and covers all of the company's locations. For the company's chicken products, the company relies on two suppliers for all of the company's locations. For the company's green chiles, each year the company contracts with a supplier from a group of farmers in Hatch, New Mexico.
The company is under contract with its principal non-alcoholic beverage providers through approximately the end of fiscal 2027 based on the estimated consumption rates. The company also contracts with a third-party provider to source the company's cooking oil.
Government Regulation
The company is subject to numerous federal, state and local laws affecting the company's business, including (1) laws relating to (a) immigration, employment, minimum wages, breaks, overtime, tip credits, worker conditions and health care, (b) nutritional labeling, nutritional content, menu labeling and food safety and (c) information security, privacy, cashless payments, gift cards and consumer credit, protection and fraud, (2) the Americans with Disabilities Act, which, among other things, requires the company's restaurants to meet federally mandated requirements for the disabled, and (3) environmental regulations concerning the handling, storage and disposal of hazardous materials, such as cleaning solvents, and the operation of restaurants in environmentally sensitive locations, all of which may materially impact the company's results of operations, capital expenditures and competitive position.
Intellectual Property
The company owns registrations from the United States Patent and Trademark Office for the following trademarks: Chuy's; Chuy's Mil Pescados Bar (stylized lettering); Chuy's Green Chile Festival; Fish with sunglasses (the company's emblematic fish design); and Chuy's Children Giving to Children Parade, which the company has the right to use under an agreement with the company's founders. The company has also registered the company's chuys.com domain name. However, as a result of the company's settlement agreement with an unaffiliated entity, Baja Chuy's Mesquite Broiler, Inc. ('Baja Chuy's'), the company may not use 'Chuy's' in Nevada, California or Arizona.
Competition
The company's main competitors are full service concepts in the multi-location, casual dining segment in which the company competes most directly for real estate locations and customers, including Texas Roadhouse, Cheddar's Scratch Kitchen and BJ's Restaurants.
Seasonality
The company's business is subject to seasonal fluctuations with restaurant sales typically higher during the spring and summer months.
History
Chuy's Holdings, Inc. was founded in 1982. The company was incorporated in Delaware in 2006.
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