Industry News | May 18, 2000

Pancho's Opens New Value-Driven Restaurant

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Pancho's Mexican Buffet, Inc. (Nasdaq: PAMX) forged into the second phase of its re-imaging campaign May 17 with the opening of its new Panchito's $3.99 Buffet(TM) in Houston, Texas.

Offering a lower price point of $3.99 and improved service speed, the concept transforms the traditional Pancho's Mexican Buffet into a quick-service restaurant format for those customers desiring fine quality Mexican cuisine at a value price. The company believes the brand extension will increase customer count by making the unit more competitive in the individual market.

Panchito's $3.99 Buffet utilizes a new logo and modernized signage set in a high energy contemporary decor. The menu consists of many of the same recipes that Pancho's customers enjoy. The company intends to convert several of its existing restaurants to the new Panchito's concept based on demographics of the locations.

"Our strategy is to increase customer count in certain restaurants in smaller markets or markets that are experiencing lower demand," said Hollis Taylor, president and chief executive officer of Pancho's Mexican Buffet. "This new restaurant format will offer a more simplified kitchen operation, with many of the favorite selections of our traditional buffet, in a quick and convenient format at a price point of only $3.99 per person. Our plan is to convert four locations into this new format by year-end."

After the successful introduction of the new Pancho's Buffet and Grill(TM) in Mesquite, Texas, Pancho's is confident this second phase will prove to be equally successful. The Mesquite restaurant opened as the new Pancho's Buffet and Grill(TM) concept in December and is continuing to produce sales well above company average. The company will be evaluating each existing location to determine which locations will benefit financially by converting to one of the two remodeled concepts.

Based in Fort Worth, Pancho's Mexican Buffet, Inc. is the only publicly held company offering all-you-can-eat Mexican food in a buffet-style format. The company operates 48 restaurants in Texas, Arizona, Louisiana, New Mexico and Oklahoma.