Camacho says new leadership was also an opportunity to “refresh every aspect of the brand,” without touching fundamentals or Tex-Mex culture. The plan involves recreating the website and mobile app in multiple phases, using new packaging, offering a streamlined catering menu and mobile catering kitchen, building an improved loyalty program, and broadening its presence with more retail gift card partnerships and bulk B2B gift card purchases via the new website.
Taco is also investing in a double drive-thru prototype and piloting digital menu boards to satisfy guests, understand new behaviors, and navigate challenges with the workforce.
In Q2 2021, 71 percent of Taco’s sales came through drive-thru, up from 54 percent in 2019. The remaining mix was 18 percent counter sales (dine-in and takeout), 7 percent delivery, 3 percent online, and 1 percent catering. During Q2 2020, which occurred soon after dining room restrictions were implemented nationwide, drive-thru accounted for 81 percent of sales.
Drive-thru increased visits by 4 percent in 2021 year-over-year, and held the largest share of off-premises transactions at 52 percent, according to the NPD Group. A host of chains have sought double drive-thrus (or even triple drive-thrus) in the past couple of years, including Jimmy John’s, Taco Bell, Portillo’s, Captain D’s, Panera, and others.
“Right now Taco Cabana is pretty large,” Yadav says. “They've got the huge patio, they've got the big dining. With the shifting through this pandemic, what you learned, is that necessary to have that large footprint? Drive-thru, pick-up, third-party delivery, is a huge part of the business nowadays.”
Before Taco reaches for national status, the CEO says there’s still room to grow in the Lone Star State. Soon, the brand will reopen a store in Longview, Texas, that closed prior to the pandemic, and the real estate team is on the hunt for additional sites in multiple markets, like Houston and Dallas.
The CEO believes Taco could realistically double its footprint within the state. Barring any delays or unforeseen circumstances, the brand should open eight to nine units this year.
To Yadav, transitioning to franchisor hasn’t been too difficult, considering his involvement with franchise advisory boards and a plethora of strategic decisions over the years. At the end of the day, he says, the goals are the same—four-wall execution is the key to success and growth.
“I learned everything what not to do as a franchisor,” Yadav chuckles. “What I thought that they could do better and what I thought they could improve more from the support point of view and probably the development point of view and strategically growing the brand from technology, research and development, innovations, training, and all those things.”
The hope is that a reinvigorated franchise model will trigger expansion that hasn’t been seen in years. From 2017 to 2019, Taco closed a net of one store, and in 2020, the brand shut down a net of 23 units.
Although the exact details of the upcoming program can’t be shared yet, Camacho and Yadav are confident in the process and where the fast casual is headed in the coming years.
“We are six months into the new leadership and the amount of work and the heavy lifting that it has been done, it is just the beginning,” Camacho says.