La Monarca: Scaling a Values-Driven Mexican Bakery Chain

By George Foster, Christy Johnson
2021 | Case No. SM341 | Length 23 pgs.

After graduating from Stanford Graduate School of Business, Ricardo Cervantes and Alfredo Livas, both from Mexico, decide to give themselves a year to try “to just go for it,” and do something on their own. After conducting researching, the two decide to open a Mexican bakery chain – with a values-driven mission.

The first La Monarca location opened in 2006. In 2021 La Monarca employed 220 people at 12 locations in the Los Angeles area, and had a revenue of $15 million.

In January 2021, a multi-brand restaurant holding company expressed interest in acquiring, or at a minimum partnering, with La Monarca. This was not the first such sound out the founders had received from companies or investors in the restaurant industry. Cervantes and Livas decided to evaluate their growth options going forward, including a relationship with the multi-brand restaurant holding company. Other options on the table included expanding their geographic footprint of stores beyond Los Angeles, franchising, food service and wholesale, and marketing branded products nationally via online sites such as Amazon or via other retail outlets such as supermarket chains.

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