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Why Olive Garden owner did not open Mexican chain: Former CEO

Not content to sell just one cuisine, Olive Garden owner Darden Restaurants operates a range of concepts, from steakhouses and Caribbean-inspired spots to seafood restaurants and sports bars.

One popular type of restaurant is notably missing from portfolio, though—a Mexican chain that would compete against the likes of Chipotle Mexican Grill.

"In that full-service environment…it's difficult to deliver Mexican at margins that make sense for a public company," former Darden CEO Clarence Otis said during a "Squawk Box" interview.

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While Otis did look into it while at the chain's helm, one thing held him back.

"There's a limit to what people think they ought to pay for Mexican food, and that price ceiling is more consistent with a fast food experience than it is with a full service experience," he said.

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Industry data sheds more light on how quickly Mexican is growing.

Sales at Mexican chains that offer limited service, like Taco Bell and Chipotle Mexican Grill, grew 9.5 percent last year to $19.7 billion, according to data from market research Technomic. Meanwhile, sales at full service chains in the Mexican category grew at a slower clip of 3.7 percent.

The vast majority of these full-service sales occurred at restaurants that did not makethe cut for the biggest 500 chains by sales. The full-service Mexican leader, On the Border Mexican Grill and Cantina, rang in at the 94th-biggest chain by sales in the country, reflecting the relatively small size of the segment.