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    A New Face for Quick Service

  • The rapidly growing Hispanic population is causing a major shakeup in the limited-service business.

    Pizza Patron / Brandon Parscale
    Pizza Patron founder and CEO Antonio Swad has leveraged the growth of the Hispanic demographic to build his Texas-based brand.

    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

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