Industry News | July 9, 2008

Salsarita's Names New CEO

Salsarita’s named Paul Mangiamele, franchise veteran, as its new CEO.

The 55-year-old Mangiamele has an extensive background in the restaurant, hospitality and franchising industries and is charged with directing Salsarita’s marketing, operations, and franchise development efforts, and he will lead the brand in fueling the company’s aggressive expansion plans.

Founded in 2000 in Charlotte by Bruce Willette, Salsarita’s has 78 restaurants in 18 states and expects to end 2008 with about 100 locations. It expects to grow to 200 restaurants by 2010. In 2007, the chain topped Restaurant Business’ list of The Future 50, which ranks the fastest-growing restaurant chains in America.

At Salsarita’s Fresh Cantina, customers can create a made-to-order meal from a Mexican menu that offers burritos, tacos, quesadillas, nachos, enchiladas, pizzas, and salads with a wide selection of meats, fresh vegetables, and homemade salsas in a family-friendly environment.

“Our mission is to be a legendary restaurant brand known for its people, food, and world-class hospitality,” Mangiamele says. “I’ve been involved with restaurants and the service industry for the last 30 years and can truly say that I’ve never been more excited.”

Mangiamele’s experience is diverse, including work in operations, franchise development, broker, and distributor networks, while also building and leading teams in start-up, growth, and Fortune 500 environments.

His background includes serving as president and CEO of Dalt’s Classic American Grill and Diner, chief development officer of Value Place Hotels, and vice president of business development for Carlson Companies Inc., franchisor for Radisson Hotels, Country Inns and Suites, and T.G.I. Friday’s. He also was a franchisee in the Pizzeria Uno system, now known as Uno Restaurant Corp.

Mangiamele most recently spent four years with Austin-Texas based Sport Clips Inc. in various senior management capacities, including chief operating officer. While with Sport Clips, Mangiamele led several significant growth initiatives that expanded the store count from 100-plus to more than 500 locations nationwide.

Willette, who previously served as Salsarita’s president, will assume the role of chairman, focusing on the chain’s expansive non-traditional development opportunities, which include strategic alliances with HMS Host and Compass Group North America, which between them operate thousands of facilities at airports, colleges, universities, and institutions around the world.

Willette founded Salsarita’s after having built a history of success in franchising. After the success of its first location in Charlotte, he and director of operations, Thang Nguyen, began expanding the concept.

A business associate, cognizant of Mangiamele’s skills and experience, was responsible for introducing him to the Salsarita’s ownership group, which also includes Vas Lahanas and Charles Ratterree. As Salsarita’s closed in on the benchmark of 100 restaurants, Mangiamele’s history of success meshed well with Salsarita’s future ambitions.

“I have to give Bruce a ton of credit,” Mangiamele says. “At this still very early stage of growth, it takes a lot for the guy that gave birth to the concept to say ‘I need to have somebody else take this to next level.’ I’m looking forward to writing the second chapter of the Salsarita’s saga.”

Mangiamele, who also has an ownership stake in Salsarita’s, is focused on controlled growth. “I really believe that if you can’t live it, you don’t believe it, and that, in part, is demonstrated by having skin in the game. I’m not just a hired gun,” he says. “I’m not going to be deal driven as much as I’m going to be strategy-driven, marketing-driven, and product-driven so we can deliver at a superior level in every market we enter.” Mangiamele is impressed with the executive team, managers, and the franchisees. “I am of the school of thought that believes your front line is your bottom line, and the operational execution within the four walls of the restaurant is paramount to delivering the highest degree of hospitality to our customers.”

Salsarita’s had 2007 sales of approximately $50 million and same-store sales growth for the first five months of 2008 is up 7.7 percent over last year–a significant figure given that many in the restaurant industry have experienced flat to negative numbers in the current economy.

With compelling unit economics and individual restaurant sales and profits that exceed industry standards, Mangiamele said Salsarita’s represents a strong investment opportunity to existing multi-unit franchisees of other brands looking to diversify their portfolio in their current markets.

“We’re interested in individuals or groups, preferably in food service, who know franchising and already have the infrastructure in place to grow the Salsarita’s brand in markets they already know and understand,” Mangiamele says.

Salsarita’s has developed a three-pronged franchising program comprised of:

a. area representatives, who are granted an exclusive territory in which they must own and operate at least one restaurant, while also recruiting prospective franchisees with assistance from Salsarita’s to open additional restaurants in their territory, for which they receive a portion of the referral fees;

b. area developers, who agree to open multiple restaurants in an exclusive territory;

c. single-unit franchisees who are granted franchises typically in existing markets where Salsarita’s is seeking to increase its presence.

Currently, about 60 percent of Salsarita’s franchisees own from one to five restaurants, 30 percent are area developers, and the remaining 10 percent are area representatives.

With nearly every member of the Salsarita’s ownership group having been owners or operators of numerous restaurant franchise concepts, they have designed an operating and franchise system that puts the operators’ concerns first, while trusting in their success to further Salsarita’s success.

“This is a company created and run by operators, for operators,” Mangiamele says. “Having been franchisees and now being the franchisor gives us a tremendous advantage. We get up every day and think about two things: how to best serve our customer and how to make our franchisees more profitable.”

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