Tortilla's founder returned as CEO, shut loss-makers and pushed system sales past £100M

By its FY25 results Tortilla Mexican Grill, Europe's largest fast-casual Mexican chain, was struggling: adjusted EBITDA had fallen to £1.1M from £4.5M the year before, £9.3M of impairments drove a £14.8M loss before tax, and the French estate — 13 locations including the acquired Fresh Burritos chain — was running an LTM loss of £1.1M. Founder Brandon Stephens came back as CEO and, by the October 2026 results presentation, had eight months of 'focused, decisive actions' behind him.

The reset closed five underperforming Fresh Burritos stores (France went from 13 to 8 sites), rebuilt governance and accounting, aligned French menus and systems to the UK model and cut £0.4M of annual head-office cost. Delivery moved from two platforms to three, adding Deliveroo alongside Just Eat and Uber Eats. The leadership was rebuilt around Stephens: Duncan Garrood as chair, Gail's Marta Pogroszewska and Loungers' Gregor Grant on the board, and ex-LEON MD Mac Plumpton as UK CEO.

H1 FY26 delivered the proof: group revenue rose 5.9% to £38.5M despite the closures, group like-for-like sales accelerated to 13.3% from 3.2%, and adjusted EBITDA swung back to +£0.5M. LTM system sales passed £100M for the first time. Delivery sales grew about 50% while in-store LFL strengthened from around 5% to over 10%. Converted French stores grew LFL 18.2% (24.4% in Q3) and France's gross margin jumped from 57.8% to 65.5%, reaching 70% by June 2026.

H1 FY26: group LFL +13.3% (vs 3.2%), adjusted EBITDA +£0.5M vs -£0.4M, LTM system sales passed £100M; France gross margin 57.8% to 65.5%

Closing the five worst French stores removed £1.1M of LTM losses at a stroke and let the surviving sites be converted to the UK playbook.

Multi-aggregator delivery added roughly 50% delivery sales for only about 1% of margin, and in-store LFL still accelerated — it complements rather than cannibalises.

Importing UK recipes, systems and governance into France lifted gross margin 7.7 points within the year.

A rebuilt board and UK leadership gave the founder's turnaround credibility with landlords, franchisees and lenders.

A returning founder can do what caretakers defer: close the loss-makers, rebuild on the home market's playbook, and widen delivery channels — growth without new capital.

Management told investors France should be profitable 'in the not too distant future'; its adjusted EBITDA loss narrowed to £2.1M from £2.8M. New targets are on the table: UK AUV from about £1.15M to £1.5M, restaurant EBITDA margin from 17.5% to 20%, a 'Tortilla 2.0' format and a loyalty programme. The balance sheet is workable but tight — £12.4M net debt against £14.4M of facilities plus a £1.3M Santander overdraft — and the muted share reaction on results day signals investors want the next half to confirm the first.