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Costa Vida restaurants are homegrown in Utah

Published July 4, 2013 2:58 pm

10th anniversary • Chain has expanded to include 50 locations in 10 states.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Costa Vida Baja-inspired fresh Mexican restaurants are opening throughout the West. By next year there may be more eateries out of state than in the chain's home state of Utah.

This year, with 52 locations operating in 10 states and Canada, Costa Vida is working to double its North American presence — on this, its 10th anniversary.

To augment its growth, Cost Vida is seeking franchisees willing to open at least three new locations. The company's average franchise agreement has been for nine stores, Costa Vida Chief Executive Sean Collins said. Most stores are franchise owned.

"We will always have 10 percent of our stores that are corporate owned and operated so we understand up-front what franchisees are dealing with," Collins said. "Franchisees themselves bring a different dynamic. They're independent owners so we must make sure they embrace our standards, that they'll make the right franchise partners."

Costa Vida is following a nationwide trend in which chains are seeking franchises rather than building and owning their own stores.

Franchises continue to grow faster than other businesses, led by restaurants and other service sectors, according to a new report released by the International Franchise Association.

"The report is good news and shows franchising remains an incredibly strong and resilient business model that generates jobs and economic growth for the American economy," Steve Caldeira, IFA president and CEO, said in a statement.

Quick-service restaurants such as Costa Vida are to add locations and employees at a slightly higher rate than the franchise sector average, according to a forecast by the association. Overall franchises are expected to add 162,000 new jobs this year.

In June, Costa Vida opened its 50th restaurant opened in Vernal. Its expansion is aimed at the Midwest, with development plans in place for Minnesota, Missouri and Montana.

A typical Costa Vida restaurant is 3,000 square feet and most have patio dining. The company prefers sites near universities and places families frequent, such as Costco or big box grocery stores.

Collins attributes Costa Vida's growth to its freshly made-from-scratch menu. Each tortilla is handcrafted daily and served hot. The sweet pork and shredded beef are slow-cooked for several hours, creating the eateries' signature aroma and taste.

Costa Vida's menu also features chicken and grilled steak, along with made-to-order burritos, tacos, enchiladas, quesadillas, salads and salsas. The firm's CEO Collins boasts that restaurant kitchens have only two canned products: condensed milk and evaporated milk for making flan, key lime pie and tres leches cake.

"The sights, sounds smells and tastes capture that unique and vibrant Baja experience," said Dave Rutter, the firm's president.

In 2005, Costa Vida rival Cafe Rio filed a lawsuit in Salt Lake City over recipes. The Provo-based Cafe Rio, founded six years before its competitor, alleged in a 3rd District suit that Costa Vida franchises had wrongfully copied and used its "trade secrets, menu, layout, food presentation, procedures and processes."

Costa Vida denied the allegations and added the chain was "completely surprised by this complaint and it's timing. We have been operating for nearly two years and have heard nothing of these allegations since we opened."

The lawsuit was settled in 2007. Terms were not disclosed.

Collins, 47, and Rutter, 51, had years of experience before Costa Vida.

The two were running their own business down the street from one another in Provo when they got the idea for their first venture: a pizzeria with arcades, glow-in-the-dark miniature golf, billiards and bowling. They bought a site in Salt Lake City at 3739 S. 900 East, which opened in 2001 as the first FatCats.

Today, there are four other FatCats family entertainment centers in Provo; Ogden; Rexburg, Idaho; and Westminster, Colo. All are corporate owned and operated.

The partners also operate two Pizza Factory franchises in Salt Lake and Ogden.

Headquarters for Costa Vida, FatCats and the pizza franchises are located in Lehi. The company employs about 500 people, 30 percent of whom work full time.

dawn@sltrib.com

Twitter: @DawnHouseTrib —

Costa Vida Fresh Mexican Grill

Founded • 2003 in Lehi

Locations • 52 restaurants in 10 states and Canada

Affiliated businesses • Five Fat Cats Entertainment Centers in Utah, Idaho, Colorado; Pizza Factory franchise in Salt Lake, Ogden

Utah • 31 Costa Vida locations in American Fork, Bountiful, Cedar City, Centerville, Clinton, Draper, Fillmore, Layton, Logan, Murray, Ogden, Orem, Pleasant Grove, Provo, Riverdale, Riverton, Salt Lake City, Sandy, Spanish Fork, St. George, Tooele, Vernal, West Jordan and West Valley City