Kettering-based Hot Head Burritos is rapidly expanding, both inside and outside the Miami Valley.
Hot Head, which opened its first store in Kettering in 2007, just opened its 13th location in the Dayton area and 25th overall store, and is on track to double that to about 50 locations by the end of 2012 with new locations in multiple states, according to Hot Head co-founder Ray Wiley.
“We want to become a national chain,” said Wiley, who also is the franchise owner of 10 Subway sandwich shops in the Miami Valley. “When I got into Subway in 1989, there were 1,000 stores. Now there are 35,000.
“Our goal is to have thousands of stores, to be honest with you. We expect to have as many as 500 stores in the next three to four years.”
Recent Hot Head developments, according to Wiley, include:
• On Feb. 8, a new Hot Head that seats 45 and employs 28 opened at 1171 E. Dayton-Yellow Springs Road in Fairborn.
• Another new Hot Head will open in about two weeks at 2369 Dayton Pike in Germantown, while another new location in Eaton is about four weeks away from opening.
• Wiley signed a lease just last week to open a Hot Head at 5662 Springboro Pike in Moraine, perhaps as soon as May, in a location that until very recently housed a Papa Murphy’s pizza shop.
• Plans call for opening new restaurants in Springfield, Kettering, Springboro and Sidney before the end of 2012.
• Hot Head will soon open its first location in Indiana, its fourth state, and is working on agreements that will bring its restaurants to Texas, Florida, Alabama, Michigan, North Carolina and Tennessee.
It already has established restaurants in Kentucky and Pennsylvania.
With its most recent expansion, Hot Head is living up to the national recognition it earned within the past year: In December 2011, it was named among the “Ones to Watch” by QSR Magazine, which monitors the “quick-service restaurant” category.
And last March, the chain was ranked 54 in FastCasual.com’s list of “Top 100 Movers & Shakers,” which recognizes restaurant chains that “best reflected the fast-casual segment’s phenomenal growth,” according to Valerie Killifer, editorial vice president in FastCasual.com’s food-service division.
There are more than 600 restaurant chains in the category. Other chains to make the “Top 100” list included Englewood-based OinkADoodleMoo, Cincinnati-based Penn Station East Coast Subs and Columbus-based Charley’s Grilled Subs.
Hot Head has managed to flourish in a competitive, quick-serve Mexican restaurant category that includes QDoba, which has five restaurants in the Dayton and northern Cincinnati area, and the behemoth Chipotle, which has 18 locations in the Dayton, Springfield and northern Cincinnati area.
Wiley — who co-founded the Hot Head chain with his wife, Cynthia — does not disclose overall sales figures or revenues, but he said Hot Head’s same-store sales were up an estimated 15 percent in 2011, with individual stores’ sales increases ranging from 10 percent to 40 percent.
Even Wiley finds it difficult to pinpoint the reasons for Hot Head’s success against competitors such as Chipotle, but he noted that even when a Hot Head and Chipotle are located in close proximity — as they are on Brown Street near the University of Dayton — Hot Head restaurants do well.
“They have a good product, we have a good product,” Wiley said of Chipotle. “We have more options (in sauces and toppings), and we appeal more to families with our kids’ menu. And we can both succeed even when we’re in the same neighborhood.”
It helps that Mexican food and other comparatively spicy cuisines are gaining in appreciation and popularity.
“People are not accustomed to spicy foods, so they find it exciting,” Wiley said of the Hot Head menu, which offers several salsa and sauce choices “from mild to wild.” The wilder side includes “Extreme Habanero” and “Straight Habanero.”
Of the current 25 Hot Head restaurants, nine are corporate-owned and 16 are operated by franchise owners. Wiley said his chain will probably top out at 20 to 25 corporate-owned stores, with the rest of the growth coming from franchisees.
The new Fairborn store is the first for franchise owner Kevin Foley, who said he’d like to open more Hot Head locations elsewhere in Ohio in the years ahead.
Wiley said it costs about $250,000 to get a new Hot Head off the ground and open, and the company prefers franchisees have a net worth of $500,000 or more.
Ultimately, Foley would like to own five to 10 franchise stores — “depending on financing,” he said — in small towns throughout Ohio.
The first 10 days of the Fairborn store have been encouraging, Foley said. “The community here has certainly embraced us.”
Contact this reporter at (937) 225-2258 or mfisher@DaytonDailyNews.com.