Fuzzy’s Taco Shop is evolving its fast-casual model by adding table service and emphasizing its popular frozen cocktails. The Dine Brands-owned chain plans to open a new location next week that reflects this shift toward a more full-service experience.
The new unit, named Fuzzy’s Tacos and Margs, will open in the Houston area. It will feature a refreshed menu, new digital ordering tools, and “Tacotenders” who will take orders and deliver food and drinks directly to customers at their tables.
This marks a major change for Fuzzy’s, which was acquired by Dine Brands Global—the parent company of Applebee’s and IHOP—in 2022. The chain is using this new concept to refresh its brand as it faces sales challenges.
According to the Technomic Top 500 Restaurant Chain report, Fuzzy’s sales dropped nearly 15% last year, and the number of locations declined by 11%. Dine Brands does not disclose detailed sales data for Fuzzy’s in its public earnings reports.
Despite the setbacks, Fuzzy’s President and Chief Marketing Officer Patrick Kirk sees a clear advantage for the chain: most Fuzzy’s locations feature a full bar, which is rare in the fast-casual sector.
“Alcohol service in fast casual is not widespread,” Kirk said in an interview with Restaurant Business. “To maximize bar sales, you want a restaurant atmosphere that encourages energy, socializing, and fun. That influences the design and service style.”
Kirk emphasized that Fuzzy’s is not fully moving to a traditional full-service model. Instead, he described the concept as “fast-casual plus,” blending fast casual with some elements of full service. This approach, he said, taps into the growing potential for alcohol sales in fast casual dining.
Currently, most Fuzzy’s customers order at a counter and pick up their food, similar to competitors like Velvet Taco and Torchy’s, which also offer margaritas and sangrias. However, Fuzzy’s stands out by providing a full bar with a wider variety of cocktails, including tequila, rum, vodka, beer, and wine.
Fuzzy’s frozen margaritas use a premium 100% blue agave Jose Cuervo Tradicional tequila, mixed with triple sec and house-made margarita mix. This contrasts with other chains that use less expensive mixto tequila.
The bar menu also includes specialty drinks like a screwdriver made with Sunny D, mango puree, and Smirnoff Vanilla Vodka, and a Double Rum Daiquiri with strawberry puree, Captain Morgan Spiced Rum, and Bacardi Silver.
“These drinks are more premium than typical frozen beverages,” said Chef Daniel Camp. “They’re a signature part of our brand, and something we’re proud to offer as we grow.”
Currently, bar sales account for about 20% of Fuzzy’s revenue, a figure higher than some casual dining brands. Kirk expects this to rise to 25% or more, with some locations already exceeding 30%.
Earlier this year, Dine Brands introduced a systemwide Happy Hour at Fuzzy’s featuring $5 and under items, including $4 house margaritas.
The new Sugar Land location in Houston is designed to encourage guests to linger and order more drinks. With Tacotenders equipped with handheld tablets, customers can easily order food and drinks at their tables without returning to the counter or bar.
This location is owned by Nazarian Global Enterprises and operated by brothers Miro and Andrew Nazarian, who also run IHOP restaurants in the region. They plan to open three Fuzzy’s locations by the end of 2025.
The menu has been updated with three distinct categories. One features the original line of tacos with unique ingredients like feta cheese and garlic aioli. A second focuses on traditional Mexican classics. The third includes creative options, such as a taco topped with hot honey.
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