UPDATE: Taco Bell Cantina franchisee schedules opening despite lawsuit

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Future Taco Bell Cantina
Taco Bell Cantina, a fast-food concept known for serving alcoholic beverages, is expected to open in the former Sugarfire Smoke House location, 24 W. Washington St. (IBJ photo/Dave Lindquist)

Update: Taco Bell Cantina, 24 W. Washington St., announced plans Tuesday to open to the public at 10:30 a.m. Saturday, Dec. 23. Flynn Restaurant Group LP, the franchisee that plans to open the Taco Bell Cantina restaurant, filed on Monday a motion in Marion Superior Court requesting a 30-day extension to respond to the lawsuit filed by Alfarah Restaurant Group of IN Inc., the franchisee that operates a Taco Bell inside Circle Centre Mall. Attempts on Tuesday to reach an attorney representing Flynn Restaurant Group were unsuccessful.

The earlier story:

The franchisee who operates a Taco Bell restaurant in Circle Centre Mall has filed suit against Taco Bell and a fellow franchisee in hopes of preventing the opening of Indiana’s first Taco Bell Cantina.

The open-kitchen concept from Taco Bell that brings together alcoholic beverages with Mexican fare is planned at 24 W. Washington St. A Taco Bell operated by Illinois-based Alfarah Restaurant Group of IN Inc. serves customers in the third-floor food court of Circle Centre Mall directly across Washington Street from the planned Taco Bell Cantina.

Alfarah Restaurant Group, based in Orland Park, Illinois, filed its complaint in Marion Superior Court on Nov. 21 against Taco Bell Franchisor LLC and Flynn Restaurant Group LP.

The lawsuit claims the planned Taco Bell Cantina is too close—within one-tenth of a mile—to the mall’s Taco Bell, setting up unfair competition in violation the Indiana Deceptive Franchise Practices Act.

California-based Flynn Restaurant Group is the franchisee that intends to operate the Taco Bell Cantina. Representatives of Flynn and Taco Bell declined to comment when contacted by the IBJ.

In an email filed as evidence as part of Alfarah’s litigation, a Taco Bell executive told Nidal Al-Farah, president of Alfarah Restaurant Group, the Taco Bell Cantina was approved as a new location because the restaurant inside the mall is considered “captive.”

The email describes captive restaurants as locations in malls and travel centers. “Captive restaurants primarily service customers who are visiting the host location (i.e. the mall or travel center),” the email read.

Alfarah argues that the mall restaurant was not defined as a “captive” Taco Bell franchise in its 2018 license agreement.

The lawsuit characterizes the Taco Bell at the mall as being accessible to office workers, convention attendees and other people thanks to downtown skywalks.

Alfarah is seeking an injunction that prevents Taco Bell Cantina’s opening, arguing that the two restaurants would serve the same or substantially similar Taco Bell food.

Although no opening date has been announced for the Taco Bell Cantina, the IBJ obtained a flier for a “VIP Grand Opening” on Dec. 22.

Taco Bell Cantina is expected to occupy the ground floor, basement and mezzanine of the Lieber Building, the site of Sugarfire Smoke House restaurant before its closure in 2020.

Stephen Ferrucci, a Fishers-based attorney representing Alfarah Restaurant Group, told the IBJ that the mall’s Taco Bell is “extremely concerned about the impact the Cantina will have on its business” and that all legal options are being considered.

Alfarah Restaurant Group operates Taco Bell restaurants at Circle Centre Mall, 49 W. Maryland St., and at Merrillville’s Southlake Mall in Lake County

Flynn, the largest franchise operator in the United States, owns Taco Bell, Pizza Hut, Wendy’s, Applebee’s, Arby’s and Panera locations that generate about $4.5 billion in annual revenue, according to industry publication Franchise Times.

Taco Bell is owned by Louisville, Kentucky-based Yum! Brands, which also owns Pizza Hut, KFC and the Habit Burger Grill.

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10 thoughts on “UPDATE: Taco Bell Cantina franchisee schedules opening despite lawsuit

    1. Right? And honestly, if someone wants TB AND a cocktail, they are not going to the mall. I don’t see it as direct competition. Apparently, they do.

  1. As someone who worked for 14 years for a gentleman, who was a small franchisee for a major restaurant chain, I can appreciate for how this is setting up for the group operating inside the Mall. They’re already paying a lot to be a franchisee, but to know that one of their competitors is going be TACO BELL, that makes no sense.

    At the very least, it sends the message that Yum! Brands doesn’t care about “some” of the people investing in their brand. Besides, selling someone a Mexican Pizza (delicious as they are…) with a margarita is kind of putting a tiara on a pig. On the other hand, it’ll make eating Taco Bell and getting boozed up a one-stop deal.

    1. This was first announced in July. Have to assume there have been discussions between now and then and this is all posturing for money and/or the ability to close their location in the mall without penalty if needed.

      Given the dearth of downtown office workers I’d need someone else to tell me how much traffic the Circle Center Mall food court still gets. But I do know that Chick Fil A did the same pivot from in the mall to outside the mall, and I frankly assumed that the same thing was happening here.

  2. It will be nice to have the vacant space occupied with hopefully outdoor seating. This section of Washington St. has been dead since COVID and Rock Bottom closed. Hopefully something will move into that space. Is the hotel still going to happen at the corner of Washington St and meridian?

    1. Completely agree, Robert H. The hotel is in foreclosure (or the foreclosure is complete and the bank owns the property now). Owner defaulted on the construction loan, after spending a bunch of it to gut the interior of the building. Qdoba is about to relocate from their location on the ground floor, so the building will be completely empty. It’s a total eyesore, and i’m a little shocked the city continues to allow it to look like a bombed out building.

      I also agree with Joe B. The CC Mall Taco Bell has to be dying, and this would seem like a possible way out for them.

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