Industry News | July 18, 2012 | QSR Exclusive Brief

Revamped Salsarita's Prepped for Growth

Some people just have what it takes to turn a brand around. And Phil Friedman, former CEO and president of McAlister’s Corporation, is one of those people.

After his Mississippi Restaurant Group purchased Salsarita’s—a fresh cantina that offers a bright and colorful atmosphere featuring signature burritos, Mexican pizzas, house-made salsas, and seasoned tortilla chips—and he took the helm last June, Friedman says the brand has improved by leaps and bounds.

“When you buy a small chain that has grown through a founder or through the early organization, often they’ve gone beyond their capabilities,” he says. That’s why Friedman and his team, including COO Larry Reinstein, worked to refresh and enhance the brand from the bottom up.

They began by creating a solid management and support team—what Friedman calls the foundation of the brand.

Adding positions like director of training, senior franchise business coach, and menu and procurement manager, along with a franchise advisory council, Friedman and Reinstein helped Salsarita’s build the backbone the brand had been lacking.

“When you look back to when we bought the company, it was a chain that had grown, but it really had not progressed far enough and really needed a change in leadership, a change in management, a change in professionalism,” Friedman says.

Friedman also knew that a rejuvenated menu had to be at the top of his agenda. But instead of simply creating a laundry list of new menu items, the brand chose to work with what it had, opting to give old favorites a facelift.

“The product was there, but it was just there,” Friedman says, calling many of the existing menu items “stale.” To remedy the situation, the brand took two menu staples—burritos and Mexican pizzas—and completely remade, repackaged, and rebranded them.

The CasaRito, launched in April, was a take on Salsarita’s ‘wet’ burrito. By bringing in new sauces and better plating, the brand now sees one-fifth of their burrito-buyers ordering the refreshed menu item, which was the first new product under Friedman’s lead.

Another twist on a classic is the Cantizza pizza, launched on July 5 in the chains 80 locations. These make-your-own Mexican pizzas come in four varieties: BBQ Pork, Chicken Fajita, Steak Nacho, and Beef Taco.

In addition, Salsarita’s re-negotiated long-term produce contracts to reduce costs and stabilize quality levels in the restaurant, and it found new sourcing for avocados to create a more authentic guacamole, which guests receive on the house.

The brand also concocted a new chicken preparation to deliver fresher, juicier, and more flavorful chicken to its diners. Friedman says the team is focused on developing proprietary salsas and introducing corn tortillas, as well.

“We’re really developing something special,” Friedman says. “When we’re done with all the work … we’re going to be looked at more and more as something a little different, a little better, and a little special.”

In turn, the team is hoping to make diners feel special, too, with its increased focus on guest experience and customer satisfaction.

“So much of what we’ve done is change the focus from looking to costs, looking at profits, to looking at the guests and looking at the experience,” Friedman says.

Not only is the brand increasingly incorporating guest satisfaction measurements—which Friedman’s says he used heavily at McAlister’s—but the team is providing more service-oriented perks than ever before, including complimentary drink and chips refills.

The focus on satisfaction all goes back to Friedman’s leadership philosophy, which he’s carried with him from his days at McAlister’s and beyond: Leaders should work hard on satisfying guests and being hands-on in the field.

“The elements of managing a chain are not different to me,” he says. “I like small chains because I think the leader can make so much impact by being involved, and that’s what I try to do.”

That’s why one of Friedman’s first orders of business when he took over Salsarita’s was to personally visit almost every franchised location. He says that for many franchisees, it was the first time they had seen a company leader in quite a while.

“It’s essential that the franchisees really feel like they have the support and commitment from the franchisor, because they’re on the front line,” Friedman says, adding that he wants the brand’s operators to feel like they’re part of a united system instead of just lone stores.

Personally visiting the franchisees creates a sense of system loyalty and involvement, Friedman says, and benefits the company in many ways.

“If you don’t know what’s really happening [in the stores], you can’t make sound strategic and operating decisions back at the office,” he says.

And while the focus for the past year has been on bolstering support for existing franchisees, the company is now looking for strong multiunit franchisees to expand the brand in new and existing markets.

“A year later, we’re getting ready to aggressively sell,” Friedman says. “We’re in a position where I think we could really grow it in the way we talked about it a year ago because we’ve put the elements in place for extensive growth.”

The brand plans to primarily stick with concentric growth, stretching out existing markets located mainly in the Southeast and Mid-Atlantic. For example, although the brand is based in Charlotte, North Carolina, it doesn’t have a presence in the state capital of Raleigh. Friedman plans to tap into that market, as well as additional markets in South Carolina and Knoxville and Chattanooga, Tennessee.

The company expects to add three or four multiunit operators by the end of the year, and Friedman even says the brand has potential to grow to 400 stores over the next five to six years.

Salsarita’s has already seen loads of success, which translate into sales, thanks to its yearlong turnaround. The brand as a whole has seen an 8.7 percent systemwide sales increase in the first four months of the years, and the founding Charlotte location has experienced a 30 percent jump in sales.

“I think the truth’s in the pudding,” Friedman says. “Motivation, commitment, excitement, and enthusiasm are so important for the success, and I think we’ve really put that into place.

By Mary Avant