Butterfly Closes $527 Million Continuation Fund to Grow QDOBA

LOS ANGELES – Butterfly, a Los Angeles-based private equity firm specializing in the food and beverage sector, announced the closing of a $527 million single-asset continuation fund to extend its partnership and accelerate the growth trajectory of QDOBA Restaurant Corporation, a Mexican fast-casual franchisor in North America with over 800 locations and approaching $1.3 billion in systemwide sales.

Apollo’s Sponsor and Secondary Solutions business led the oversubscribed transaction, with additional commitments from a diverse group of new and existing investors, including Painswick Capital, a specialist single-asset continuation vehicle firm established in 2024 by John L. Garcia, Chairman and former CEO of AEA Investors. The transaction provides an attractive liquidity option for QDOBA’s existing investors, strengthens the company’s capital structure and provides a clear runway to achieve its next phase of growth and value creation, the company said. 

Since acquiring QDOBA in 2022, Butterfly has executed numerous key strategic initiatives, including enhancing its management team with multiple executive hires, transitioning to a franchise-first model and reigniting new restaurant development momentum, the company said. These initiatives have transformed the company into a high-growth and asset-light operator that is the No. 1 franchisor and No. 2 brand in the Mexican fast-casual category in North America. Looking ahead, QDOBA has a clear, long-term growth plan underpinned by attractive unit economics, a robust new restaurant development pipeline and enduring category growth tailwinds, the company said. 

“QDOBA is the best-kept secret in the restaurant industry. With mid-single digit comp sales in each of the past three years and projected 10% annual new unit growth, QDOBA is now one of the fastest growing national restaurant brands in America,” said John Cywinski, CEO of QDOBA. “Given this trajectory, we expect to double QDOBA’s system sales over the next five years, and I honestly can't think of a better partner than Butterfly to help us unlock our full potential."

“We are proud of the success that QDOBA has achieved since our original investment, but we are even more thrilled to double down on our partnership with John and his incredible team as they embark on this next stage of growth,” said Adam Waglay, co-founder and co-CEO of Butterfly. “Mexican fast-casual remains one of the highest growth and most attractive categories within the broader restaurant sector, and we are excited to continue backing the category-leading franchisor for years to come.”

“This transaction marks our first continuation fund and highlights Butterfly’s ability to remain creative in the current market to deliver attractive liquidity options for our investors while supporting the ongoing growth of our portfolio companies,” said Peter Tang, chief financial officer and managing director of Butterfly. “We are very grateful for the enthusiastic support we have received in this transaction, which we believe is a win-win-win for the Company, its existing investors and our new partners in the continuation fund.”

“We are pleased to partner with Butterfly and lead this transaction, which enables Apollo S3 to invest in QDOBA, a clear category leader, and a business which Apollo funds have successfully invested in previously,” said Steve Lessar, Apollo partner and co-head of S3. “We have been impressed by the progress that Butterfly has made in positioning QDOBA for sustained growth and believe the depth and breadth of the Apollo platform enables us to execute bespoke transactions like this across a variety of sectors and asset categories.”

Evercore served as exclusive financial advisor to Butterfly, Kirkland & Ellis served as legal counsel to Butterfly and Weil Gotshal served as legal advisor to Apollo S3.