By Ed Avis
COVID affected lots of aspects of the Mexican/Latin restaurant business, but it did not stop the growth for many multi-units. In fact, our research shows that the number of units operated by the largest 50 multi-unit brands has steadily climbed since the pandemic hit, from 15,811 units in 2020 to 16,702 units this year.
This stands to reason, as most multi-units offer robust delivery, drive-through and/or patio service. It’s probable that all of the top 50 multi-units offer delivery, at least with a third-party service, and 17 of the top 50 have drive-throughs at most or all of their locations. Furthermore, a majority of them – 34 out of 50 – have patios as part of their store design, allowing them to serve clients on-premise even when dining rooms were shut down.
New to the Top 50 list this year are Velvet Taco and Fajita Pete’s.
Velvet Taco, based in Dallas, has steadily added units during the pandemic. The restaurant is known for its gourmet tacos – such as the Chicken and Waffle taco, the Falafel taco, and the Korean Fried Rice taco – and lively dining rooms that stay open late. It debuts at 43rd place on our list, with 30 units. The company, founded in 2011, says it will have 40 units by the end of 2022.
Fajita Pete’s, founded in Houston in 2008, opened a dozen locations in 2021 and debuts on our Top 50 list at 48th place, with 27 locations. As the name implies, the restaurant specializes in fajitas, with several “family size” options on its menu. Part of Fajita Pete’s success is due to its focus on off-premise dining, which definitely has helped since COVID started.
Read on to learn about the growth strategies of two other Mexican multi-units, Barberitos and Feebirds World Burrito.
Barberitos Learns from COVID
Downing Barber
Downing Barber, owner of burrito chain Barberitos, is looking forward to growth in his company as COVID and other challenges ease. Barberitos has 51 locations spread from Virginia to Florida.
“We were growing rapidly before COVID, and then over COVID we lost three or four stores and now we’re back growing again,” says Barber, who founded the restaurant in 2000. “We have four stores in construction now.”
Barber says COVID taught his company a few lessons that should help it thrive in the years ahead. For example, the restaurants, which have no drive-throughs, have mastered online ordering and working with the delivery services, which was essential when dining rooms were closed. And a lingering COVID effect – staffing challenges – has forced the restaurants to operate with fewer people. One way they make do with less people is to spread out the prep work. Rather than get everything done at once in the morning, now some tasks are done during slow periods in the rest of the day, Barber says.
“In order to make the wheels still run we have to do some things differently,” he says. “At the end of the pandemic I have hope that we’ll be able to run our restaurants leaner and meaner. We still have good sales and continue to grow the online business. So at the end of the day I think it will all work itself out.”
Barberitos is 100 percent franchised – there are no company-owned stores. Barber himself owns four franchises, which he says helps him understand what other franchisors have to deal with.
“We’re all in it together,” he says of the all-franchise philosophy. “There’s no ‘corporate’ anything, that word is not even allowed. It’s been a good mentality. I don’t want people saying, ‘You can do it because you’re a corporate store.’ No, we all have to do it the same. I go wash the dishes just like you would. I kind of like it – I can go hang out in the back and just be with myself.”
Barber says he would like to add locations beyond the Southeast, but doing that would require an expansion of the company’s supply network. They currently use five Sysco warehouses as distribution centers. Adding other Sysco facilities to their network would only make sense if there were enough Barberito’s locations in the vicinity.
“We pack these houses with product so that we have efficiencies,” he says. “As the supply chains get back to normal we’ll look at moving beyond the Southeast, because we do a fine job competing against all the national brands.”
Barber adds that the restaurant’s competitive edge is the quality of the cuisine. Everything is made fresh in each restaurant daily, including the salsas, guacamole, hot sauce, meat marinades and salad dressings: “I think it’s the only thing that helps us compete,” he says. “I can’t say we’re the fanciest or the prettiest, but we have the best tasting food.”
Freebirds Innovates, Grows
Freebirds
Freebirds World Burrito, located entirely in Texas, opened four units in the fourth quarter of 2021 -- to bring their total to 57 -- and is hitting the gas in 2022.
“We expect to double in size over the next five years, if not sooner,” says Alex Eagle, the company’s CEO. “We are expecting 20 percent growth year-over-year with at least 10 new locations in 2022.”
In contrast to Barberito’s, all Freebirds locations are company owned. Eagle says franchising is not the company’s plans.
Freebirds’ growth is being accompanied by a fresh look that was rolled out to all locations in 2021. A series of murals on the dining room walls are key to the new design. A mural of blue and white clouds titled “It’s Your World” dominates one wall, and graffiti-like mural on another wall spells out “Welcome to Freebirds.” The restaurants also received new custom-made wooden interior tables and chairs and the patios were updated with new chairs and updated umbrellas.
“Every brand needs to refresh and update to stay relevant,” Eagle says. “So far the new designs have been very well received. People love our new patios.”
Innovation is also part of the company’s growth plan. For example, the company is developing a plan to test a series of robotic “takeout stations” that will serve freshly made hot meals in locations such as office complexes, airports and hosptials. Freebirds has partnered with tech company Now Cuisine on the program, which was announced in late 2021.
“The reason Freebirds partnered with Now Cuisine was because of their innovative technology which ensures every burrito bowl is fresh and made to order,” Eagle says. “Instead of one driver delivering one meal at a time, these will help meet consumer demand for prepared meals that are faster, fresher, and cheaper in a more environmentally friendly way.”
Innovation Leads the Way
Naturally, Freebirds isn’t the only Mexican/Latin multiunit expanding the use of innovation. A long list of them adopted some kind of new technology in 2021.
For example, Salsarita’s Fresh Mexican Grill, which is number 22 on the Top 50 list, launched a new inventory and scheduling software suite – Data Central from PAR – in September.
“What used to take days to pull data for reports now takes less than an hour with Data Central,” said Tim Carter, Salsarita’s CFO, in a press announcement. “There’s also been significant time savings for our administrative staff with more efficient data flows using the system.”
Qdoba, the third largest chain on our Top 50 list, adopted a customer service management program from Service Management Group in 2021. The program allows the company to get feedback from customers and gauge their sentiment, even from unstructured answers.
Speaking of customer engagement, Del Taco, which is number 5 on our list, developed a new tech-based loyalty program in 2021 called Del Yeah! The app uses technology from Sparkfly to integrate with the restaurant’s POS system and facilitate customer redemption of loyalty points.
Finally, El Pollo Loco, which is number 6 on our list, turned to GPS in 2021 to improve its curbside pickup service. The customer places an order on the El Pollo Loco app, drives to the restaurant and parks in the lot, and the system notifies the restaurant that the customer has arrived.
Sidebar: El Pollo Loco Honors its Mexican Roots with James Beard Campaign
El Pollo Loco, which has 480 units and sits at number 6 on our Top 50 list, believes that acknowledging its Mexican roots is key to success. The recipe for its famous chicken came from Mexico, and the company works hard to honor the culture behind the brand.
“El Pollo Loco wouldn’t exist without the tradition and cultural influences that have built our brand,” says Andy Rebhun, senior vice president of marketing. “We want to honor the culture of both the community we were built from and the communities we serve today.”
Last September El Pollo Loco put a spotlight on the role of the Hispanic community in the restaurant industry by initiating a campaign to get more Hispanic nominees in the 2022 James Beard Awards. The effort, called “For Your Consideration,” emulated the promotional campaigns movie studios undertake to get their stars and films nominated for Academy Awards. The campaign, which highlighted 11 Hispanic chefs, included a full-page print ad in the New York Times, among other promotions. The James Beard Award semifinalists will be announced February 23.
“The public response was celebratory and positive across the board,” Rebhun says of the campaign. “The James Beard Foundation was receptive, and the 11 participating chefs were thrilled to represent the community. All in all, we achieved our goals tenfold.”
