In today’s ultra-competitive market—a market where hundreds of millions of Americans hold an estimated buying power of more than $12 trillion—companies can’t afford to miss out on any slice of the consumer pie.

Especially not a slice that represents the fastest-growing demographic in the entire country.

As the largest ethnic minority in the U.S., the Hispanic population grew 43 percent in the decade between 2000 and 2010 and now makes up 17 percent of the population, according to The NPD Group, a market research firm. By 2050, the Census Bureau predicts, the group will account for 23 percent of the U.S. population.

Not only are Hispanics changing the demographic makeup of the country, but they are also making a remarkable impact on all aspects of the quick-service business, from marketing and branding to product development, hiring, and more.

“The Hispanic demographic is young, largely family oriented, densely grouped, and extremely fast growing, so it makes sense to focus on them,” says Antonio Swad, founder and CEO of Dallas-based Pizza Patrón, which caters to the Hispanic demographic.

A Hispanic haven

It’s not just the Hispanic presence in the U.S. that is exploding—their buying power is mounting, too. According to an August 2011 report from global business intelligence firm IBISWorld, Hispanics’ buying power is “escalating steeply,” estimated to reach $1.6 trillion by 2016. This 48.1 percent growth compares with the overall U.S. population’s predicted 27.5 percent growth, to $14.7 trillion total.

Hispanics are also a young demographic, with more than 23 percent of the population under 18 years of age, says Liz Geraghty, vice president of brand marketing for Wendy’s. “As a restaurant brand, you really have to engage and connect with this consumer to succeed and to stay relevant,” she says.

Quick serves in particular are smart to target this demographic, as Hispanics have proved to be above-average limited-service users. According to NPD, more than 84 percent of Hispanics’ restaurant visits are at quick serves, and the average Hispanic consumer visits a limited-service restaurant 155 times each year, compared with the general population’s 151 visits.

“Four or five visits more per person per year is quite a bit of volume,” says Bonnie Riggs, restaurant industry analyst at NPD. The demographic also tends to use quick serves more for the breakfast daypart and snacking opportunities, and they’re above-average combo-meal purchasers, she says.

Because Hispanics were one of the hardest-hit demographics during the recession, they’re flocking to quick serves for value and an easy way to feed the entire family, says Julia Gallo-Torres, foodservice category manager at market research firm Mintel. “Hispanics really don’t like to go eat out by themselves. They prefer to take their family members,” she adds. “They like it when all of them can go, and because of budgets, they really turn to fast food because that’s the place where they can get the most for their money.”

They’re also above-average users of hamburger, chicken, and Asian concepts, Riggs says. “It’s the cheaper meals. You can feed a family easier that way,” she says. “I think the way to attract them is to understand that family meal deals will be important to them.”

The heat factor

Family-sized meal options aren’t the only thing Hispanics would like to see on limited-service menus. Because spicy and flavorful foods are a staple of many Hispanic cuisines, Gallo-Torres says, brands would be wise to create more flavorful menu options to draw in these guests.

“And that means more than just throwing hot sauce on a sandwich,” she says. “What it means is trying to use ingredients that are familiar to them.” Further, she says, brands must develop items that have specific appeal to Hispanics, rather than to a mass audience.

At Pizza Patrón, specialty pizzas are created for the Hispanic consumer on a regular basis, driven either by a Mexican flavor profile or a cultural behavior, says Andrew Gamm, the company’s brand director. A recent product, La Choriquezo, was inspired by a well-known Mexican dish of the same name that combines chorizo and cheese and is served with tortillas. Earlier this year, Pizza Patrón also introduced a proprietary pepperoni developed in partnership with Tyson. The product, which features spicy jalapeño chunks and is unique to the brand, capitalizes on the Mexican affinity for foods with heat.

“It doesn’t necessarily relate to any dish, other than being spicy, but we’re branding this in a way that gets the attention of our core customer,” Gamm says. Called La Chingona—which translates roughly to “Badass Pizza”—the product appeals to Hispanic males, saying, “This pizza is so hot and spicy, we dare you to try it,” Gamm says. “We’re using the colloquial Mexican terminology that they use every day to let them know, ‘Hey, we get you. We understand you, and this brand is a place you can feel at home.’”

As far back as 20 years ago, Wendy’s was tapping into Hispanics’ affinity for spicy foods with its Spicy Chicken Sandwich, Geraghty says.

“That was a really bold move, and even today, our Spicy Chicken over-indexes with that target consumer, as do products that deliver a bolder and a higher level of taste and spice,” she says. This demographic also has a craving for fresh produce and high-quality, natural foods, Geraghty says, “so a lot of that is beginning to influence our thinking, as well.”

While brands are speaking directly to Hispanics through specially crafted menu items, they’re also finding that many of the Hispanic-centric products they create appeal to the general population, too. In the South in particular, Gamm says, Latin and Mexican flavor profiles are becoming more mainstream and in demand. “People are looking for more flavor,” he says. “From burger chains to chicken concepts to pizza brands, they’re developing products that target these flavors.”

Authenticity is also something that Hispanics, as well as the wider population, are starting to insist on when it comes to ethnic and regional cuisines. “The Hispanic community prefers authentic-made products because they have flavor and heat levels that you just don’t get from manufactured products,” says Jeff Sinelli, creator of Texas-based Burguesa Burger, a Mexican-themed burger brand, as well as sandwich chain Which Wich. “They’re also more natural and not filled with [unnecessary] ingredients. It’s fresh; it’s hand-made; it’s made with craftsmanship.”

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A message that resonates

If brand executives and operators have heard it once, they’ve heard it a million times: In today’s America, every company needs a Hispanic-focused marketing strategy. “Hispanics are growing, and they’re a very important group of individuals to be targeting,” Riggs says. “You must have a program that will not only talk to the English-speaking Hispanics, but those that are bilingual or non-English speaking, because that’s a pretty big number.”

Brands are also crafting marketing campaigns around what Hispanics care about most: family, quality, and authentic engagement. According to NPD, 39 percent of Hispanic visits to limited-service restaurants include children, compared with the general population’s average of 30 percent. Marketing to this demographic in a way that shows families are welcome can influence their decision to visit a particular concept.

In 2013, Wendy’s launched a full-scale Hispanic marketing program called “La Familia Rojo,” which strategically focuses on values like family and quality, Geraghty says.

“We went back to our roots and recognized that, in many ways, Wendy’s as a company shares the same values as the Hispanic consumer,” she says. “Family is very important to the Hispanic community. Wendy’s started as a family business, and it’s still very much a family company.”

The demographic is also “seeking better in everything they do,” Geraghty adds. “At Wendy’s, we’ve always been focused on higher quality and higher standards,” she says. “So Hispanic consumers appreciate the fact that we hold ourselves to a higher standard and that we have high aspirations.”

The “La Familia Rojo” campaign began with a series of commercials featuring a family of Hispanic characters facing everyday situations. “We’ve reflected the fact that Hispanics, like all of us, live in a multicultural world,” Geraghty says. “They have one foot in the Hispanic culture and one foot in the American culture.” One recurring character, a teenage girl, reflects this multicultural aspect through the relationship with her English-speaking boyfriend. “Whether you speak English or Spanish, you understand what’s happening there, and it’s very reflective of our current cultural realities,” Geraghty says.

Though it will use additional TV and online marketing tactics in 2014, the Wendy’s campaign has gone offline, too, with in-store point-of-purchase materials in both English and Spanish. “We’re welcoming people to speak whatever language they choose to order in, and we want to make it easy for them,” Geraghty says. In addition, bilingual coupons will be used in the future to promote national specials and campaigns, she says. “We have significantly increased our investment in this area from a marketing standpoint, and, given [Hispanics’] size and growth and their alignment with our brand values, we plan to continue to do that,” she adds.

Authentically addressing and connecting with Hispanics often means brands need the help of those who know this demographic best: Hispanics. If brand leaders aren’t Hispanic, Pizza Patrón’s Gamm says, companies must recruit Hispanic talent to help them glean insights into this market and guide marketing tactics.

Gamm says Pizza Patrón’s Mexican identity and the presence of Hispanic employees inside the company allow it to experiment with promotions other brands wouldn’t dream of pulling off. Several years ago, for example, Pizza Patrón launched a marketing campaign that allowed guests to pay for pizza with pesos.

“A lot of our customers go home during Christmas to Mexico to visit family and they come back with pesos,” Gamm says. “We thought, ‘They’re just sitting in the sock drawer at home doing nothing until their next trip back, so let’s get them out of there and let [guests] trade them in for pizza.’”

Hispanic to the core

Rather than relying solely on marketing efforts to tap into the Hispanic consumer base, some concepts have focused their entire brand on delivering an authentic Hispanic experience that speaks to the burgeoning demographic.

While Pizza Patrón defined itself as a Latino-focused concept from the start, its target audience has become even more specialized over the years: blue-collar workers born in Mexico who prefer to speak Spanish. “That’s a distinct position to hold,” Gamm says. “Because our core customer is that demographic, it completely affects every decision we make, from hiring to menu development, service strategies, marketing tactics, and pricing.”

This unique branding is what allows the chain to survive in the crowded pizza space, Gamm says. “It’s far too competitive and saturated to enter without a distinct, unique position that nobody else operates in,” he says. “We want to be the experts in this area and the leaders in this area, and fortunately we’ve been doing it a long time.”

At Burguesa Burger, even its name—short for the Spanish word hamburguesa, meaning hamburger—reflects its dedication to creating a Mexican identity and experience. The brand also uses as many Hispanic products in the store as possible, whether it’s Mexican Coca-Colas or authentic tortillas.

“We highlight some of our Mexican brands that are injected into our process so that they’re in the eyesight of the consumer,” Sinelli says. “You see a smiling Hispanic individual working for the brand, too, so it’s all tied together. It’s 100 percent authentic.”

A stake in the future

While many, if not all, brands in the quick-service space are growing more concerned with attracting Hispanic customers to the concept, some are also focused on bringing Hispanic franchisees into the fold.

According to the International Franchise Association’s (ifa) 2007 Franchised Business Ownership survey, Hispanics owned 5.8 percent of the franchised businesses in the U.S. that year. Hispanic franchisees also accounted for 7.1 percent of foodservice ownership, as well as 17.9 percent of limited-service franchises. Interest among the demographic continues to increase, says Jose Torres, managing partner of franchise consulting firm FranNet, noting that Hispanic awareness of franchising has grown tenfold in the last five years.

Brands’ awareness of the many strengths Hispanics bring to the table is also growing, starting with recognition of their passion for entrepreneurship. “I would say 75 percent of Hispanics, if you ask them, would rather own their own business than work for somebody else,” Torres says. “And that’s much higher than the general population.”

As a family- and community-oriented culture, Torres says, Hispanics also have a natural affinity toward cultivating and growing a small business that feeds off of the local community. “They strongly believe in building ties with their community,” he says. “And any franchise—no matter what it is—needs to be really well connected to the community where they’re doing business.”

Recruiting Hispanic franchisees also gives brands a direct connection to Hispanic communities and consumers. “We have members that certainly don’t want to be left behind, and they see that, in terms of reaching new markets or increasing their footprint in their communities, they certainly need to engage Hispanics,” says Miriam Brewer, senior director of education and diversity for the IFA. “Companies who are not actively recruiting Hispanics are going to be left wondering what happened.”

Unfortunately, Brewer says, Hispanics today face several obstacles when it comes to franchise ownership in the limited-service world and beyond. First, she says, Hispanics frequently don’t leverage the support parent companies usually provide franchisees.

Second, Hispanics often have trouble getting access to the capital they need to become a franchisee.

“Hispanics are growing in terms of affluence and access to capital, but Hispanics traditionally are not big on debt,” Torres says. “They don’t like to go out and get into debt to buy a business. So a lot of them wait until they have enough capital, and they pool capital through their family and their friends to buy businesses.”

Hispanics are also often skeptical of franchising; Torres says they see it as “buying themselves a job.” Instead, they want to buy a business, one that allows them some latitude to adapt and connect with their local community. “Obviously they recognize that they cannot change the systems or the franchise they’re buying,” he says. “But they want to make sure that the franchise recognizes that they do deserve a little latitude in connecting with their local community, whether it be in advertising or product mix or the operating hours that they’re available.”

Aside from brands that cater specifically to the Hispanic demographic—such as Pizza Patrón, El Pollo Loco, and Pollo Campero—Torres says there are many examples of franchises recruiting Hispanic operators.

Burguesa Burger has even gone so far in its quest for authenticity as to recruit only Hispanics as franchisees. Though the brand initially had non-Hispanic operators on board, “we realized that this brand really belongs in the hands of the Hispanics,” Sinelli says. “We’re only seeking Hispanic franchisees for this brand because we want to keep it as authentic as
possible.”

Correction: An earlier version of this story incorrectly called the "La Chingona" pizza "La Timona." QSR regrets the error.