Revamped brand design drives sales and development
The new Minneapolis support center also allowed Creel to recruit Mark Kocer as Taco John’s new chief operations officer in October. Kocer previously served at Arby’s for 20 years, most recently as division vice president, and helped eliminate redundancies, streamlined the brand’s performance, created a national catering program, and implemented several new technologies and operational processes.
“We went through a rebrand with Arby’s about 10 years ago, and it dawned on me sitting here today, one thing we were told by an agency was that we were hiding in plain sight,” Kocer says—and the same could be said for Taco John’s.
That’s why the brand underwent a massive rebranding effort in 2019 with a new restaurant prototype design in an effort to fully embrace its new tagline, “bigger, bolder, better,” created with the help of Adrienne Weiss’s brand development team.
The prototype integrates Taco John’s updated logo, brighter and bolder colors, contemporary branding and packaging, larger dining room windows, tile floors, and acoustical ceilings. It also incorporates digital exterior menu boards and ordering kiosks in the dining room.
After introducing the remodel program to the Taco John’s system in 2020, the new image brought a double-digit increase in sales, according to Creel, and about 75 percent of restaurants in the system now feature the sleek look and design. The brand’s top 25 percent of units reached $1.51 million in average unit volumes after rolling out the updated design.
Drive-thru business represents about 65 percent of systemwide sales at Taco John’s, and during the pandemic, the brand began opening drive-thru-only models—a few of which outperformed the chain’s average AUVs. Over the next three to four years, Creel estimates another 40 drive-thru-only restaurants will open, filling in existing markets. And simply having a drive-thru model shielded the brand from some pandemic-related challenges, and in turn, helped to attract new prospective brand partners.
The rebrand, coupled with a new focus on recruiting multi-unit franchisees aiming to develop new markets, led to the largest franchise agreement in Taco John’s history: a 50-unit deal with Meritage Hospitality Group, the largest franchisee of Wendy’s, in August 2021. Per the agreement, Meritage will build the new restaurants by March 2026 in Michigan and Ohio, with the option to develop an additional 150 restaurants.
“Bringing in a quality franchisee like that is really going to help the brand,” Creel says. “Today, we’ve got a lot of 10, 15, 20, and 30-store franchisees, and I see that being the trend going forward."
While Taco John’s historically has had a lot of single unit operators, the deal with Meritage opened the brand up to the eyes of other multi-unit, multi-brand operators—such as an operator in Boston, who signed to open 22 stores. To capitalize on its time in the spotlight, the brand began offering three years of reduced loyalties for any new multi-unit franchisee who agreed to open five or more stores in 2021. The initiative also included $10,000 in dedicated marketing funds to spend within 120 days of opening each store.
The aggressive incentive offer paid off. Over the next four years, approximately 120 Taco John’s stores are slated to open—which is the largest development pipeline the brand has ever had, Creel reveals.
“We hired consultants to help us in 2017 and 2018, and like Popeyes, everyone thought they reinvented themselves overnight when they became so popular. The truth is, it was five to six years they spent getting up to that point,” Creel says. “We’re at that five-year point, and I think for us it’s going to happen, and they’ll think we did it overnight.”
Earlier this year, Taco John’s also launched its new points-based loyalty program, in which customers earn 10 points per every dollar spent, and earn their first reward at 100 points. Guests previously had to visit a Taco John’s a certain number of times before earning rewards, so the new program gives customers some much-desired immediate gratification.
“I think it’ll go a long way for driving frequency for the brand,” Westrum says, and the swap has already paid off. The brand experienced a whopping 30 percent increase in consumer transactions where guests are earning or redeeming points since implementing the new program, he notes.
“We’re very excited about the brand position in the sense that more and more consumers are desiring Latin-inspired foods, particularly younger consumers, and Mexican quick-serve is growing,” Westrum adds.
“Our brand position is a higher-quality quick-service, or a cheaper, faster, fast casual. It has merit all across the country, and I think we’re in a very advantageous brand position to enable growth going forward, and all the data in the world supports that."