Growth | June 2013 | By Christa Gala
Breaking Up Is Not Hard to Do
Sometimes, parting ways can be advantageous.
In May 2012, Fiesta Restaurant Group, owner of fast-casual brands Pollo Tropical and Taco Cabana, split from Carrols Restaurant Group, the nation’s largest Burger King franchisee. Fortunately, there were no hard feelings.
“Originally, the idea was that the three companies would be worth more separate than they were together,” says Fiesta Restaurant Group CEO Tim Taft. “Since then, that thesis has been proven correct in light of the stock performance of both companies.”
In fact, both Taco Cabana and Pollo Tropical experienced same-store sales increases in the fourth quarter of 2012—6.8 and 8.3 percent, respectively—and are going through a bit of a growth spurt. In years past, the brand might have built five to six new restaurants a year. “Last year we built 10, and this year we’re going to build 14–17,” Taft says. “That ramping up of numbers will continue.”
Kathy Hayden, foodservice analyst with research firm Mintel, says differentiation and freshness are key components for any Mexican fast casual to find success. “They’re popular flavors, and they’ve been around long enough for people to look for a little bit more authenticity and not just have everything covered in melted cheese,” she says.
Taco Cabana and Pollo Tropical, with 284 combined locations in the southern U.S., the Caribbean, South America, and Central America, encourage customers to create their own flavor profiles at salsa bars.
There’s a homemade element to the concepts, too. “With both brands, we make all of our salsas and sauces by hand all day long,” Taft says. “People give you credit for that.”
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