KBRA Assigns Preliminary Ratings to Qdoba Funding LLC Series 2023-1

KBRA assigns preliminary ratings to the Series 2023-1 Class A-1-VFN Notes, Series 2023-1 A-1-LR Notes and Series 2023-1 Class A-2 Notes.

Qdoba 2023-1 is the inaugural securitization in which Qdoba Restaurant Corporation (Qdoba or the Company) will contribute substantially all of its revenue-generating assets to the Issuer as collateral for the offered notes. Similar to other master trust WBS transactions, the Issuer can offer subsequent series of notes if certain requirements in the transaction documents are met. The Issuer is issuing three note classes totaling $330.9 million (the Series 2023-1 Notes). The collateral includes existing and future franchise and development agreements and associated royalties and fees in the US and Canada, existing and future company-operated restaurant synthetic royalties and profits, other fees and income, and intellectual property. The proceeds from the offered notes will be used to refinance existing debt, pay transaction expenses, repay a portion of the outstanding preferred stock of the parent and for general corporate purposes.

Founded in 1995, Qdoba is the largest franchisor and second-largest brand in the Mexican fast-casual restaurant category based on system-wide sales (SWS). The Company is known for its customizable burritos, burrito bowls, nachos and quesadillas, and serves various toppings free on entrees. As of July 9, 2023, Qdoba had 727 locations, of which 531 are franchised and 196 are company-owned, with 12 international locations in Canada. As of the last twelve-month period ended July 9, 2023 (LTM Q3 2023), the company generated approximately $1.1 billion in systemwide sales.

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Related Publications

• Whole Business Securitization (WBS) ABS Global Rating Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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