When Daniel Smith became Rusty Taco president in May, he knew he joined a great brand. However, the executive is honest enough to admit the brand has also been stagnant over the past few years.
Smith felt the chain, founded in 2010, was stuck in the past, which “can be dangerous for restaurant companies.”
“I was good-looking when I’m 18, but when I get to 25, I’ve got to comb my hair differently,” Smith says. “I’ve got to dress a little differently, and we can’t just rely on what’s been going on in the past.”
Rusty Taco has more than 30 locations across 13 states.
Inspire Brands—the owner of Arby’s, Sonic, Dunkin’, Jimmy John’s, Buffalo Wild Wings, and Baskin-Robbins—purchased Rusty Taco in 2018. The restaurant group grew the fast casual’s footprint by more than 50 percent before selling it to private equity firm Gala Capital Partners in 2022.
Before officially arriving, Smith spent 30 days looking at data and trying about 20 meals at various restaurants. Once he spoke to workers and franchisees, he landed on five priorities to move Rusty Taco forward.
The first was realigning the restaurant support center. Smith switched out roughly 80 percent of the team because “they were not going to be the team that was going to get us where we needed to be.” The second point was serious franchisee engagement. When Smith roamed restaurants for a couple of months, he shared with operators what he thought the brand can do. He also wanted to provide a listening ear to those actually executing the brand on the frontlines.
“I went out and listened, and when I saw things that they were doing, they would say, ‘Yeah, this isn’t right. I know you’re probably going to call me out on it,'” Smith says. “I very quickly would say, ‘No, I don’t understand why you’re doing it that way. Help me understand.’ I’m an operator too. I’ve run many companies. … We took away a lot of great ideas.”
The third part was repositioning the company and marketing program. Smith says Rusty Taco wasn’t telling the right story in the right tone. The brand voice needed to change.
“I think we were looked over instead of looked at, and so we’ve begun a process of just completely changing the way we market and the way we’re presenting the brand,” Smith says. “We’re getting a lot of great feedback, and the results on our analytics have been very positive, and I’ve got people all over the country reaching out to me saying, ‘Hey, I really like what you guys are doing.'”
Smith hired director of marketing Natalie Johnson—who previously held a senior marketing role with Raising Cane’s—to drive engagement, strengthen brand awareness, and connect more effectively with customers.
She wants to remind guests that Rusty Taco is a place with real ingredients and authentic flavor.
“I feel like we have a larger loyal fan base than people may think, at least it’s bigger than I thought when I started here,” Johnson says. “So a lot of people have been coming here for years and they are very familiar with the brand, but I’m hearing a lot that there’s not much awareness and that’s the biggest thing. So it’s not necessarily that we’re missing something or lacking in the restaurant as far as our operations or our food or standards. It’s really just awareness.”
That ties into Smith’s third goal, which is to re-evaluate all menu offerings. The brand offers a selection of handmade tacos, breakfast tacos, nachos, desserts, sides, and margaritas. Recently, the company launched the Sunrise Slammer breakfast burrito as the September Taco of the Month, which Smith says was “one of the most popular tacos we’ve ever served.”
The fifth and final priority was to create a more compelling business model for franchisees.
“I don’t think the previous administration really created a compelling business model,” Smith says. “They ran with the same business model from 2010 and things have changed. I’ve also been listening to franchisees. These are things that they see—that if I do this, unlike the way I’ve been told, it’s more lucrative for me. So, absolutely. It’s a lot of give and take with the franchisees listening to them and taking best practices.”
When Smith joined Rusty Taco, he brought his extensive restaurant background, including experience as a franchisee with 12 restaurants and as a COO for various companies. He noticed the brand’s franchisees varied widely—some were sophisticated operators managing multiple brands, while others owned only one or two units. This diversity led him to bring on Roland Wayment and Dustin Drago to improve franchisee support and enhance service levels.
Wayment and Drago’s objective is to engage with each restaurant as if they were the owners and work closely with franchisees to ensure success. They’ve established criteria to help guide franchisees, including focuses on food quality, customer service, and ambiance. The duo is asking questions like, are they preparing food correctly? Is the atmosphere inviting? Are franchisees properly managing their operations?
Smith says the brand isn’t taking on a policing role, where it catches franchisees making mistakes. Instead, its focus is supporting them in running their businesses effectively. The chain is dedicated to maintaining strong communication and helping franchisees align with overall goals so they understand the reasons behind certain strategies. If the company can’t clearly explain the purpose of what it’s doing, then it’s a sign the brand needs to rethink its approach.
“They’re going out and engaging with the franchisee saying, ‘Hey, let me help you run the restaurants better. Let me tell you some things we see. This is what your guests are saying,'” Smith says. “We’re taking the time to pour into the data and bringing the data back to them.”
In terms of future development, Rusty Taco is open to all possibilities. It will grow with traditional storefronts, and nontraditional locations in stadiums, airports, grocery stores, and upscale travel centers. In either case, the chain wants partners to understand that it’s not like Subway where an operator could open the door and people immediately recognize it and walk in. Instead, Smith says Rusty Taco is a restaurant that requires time and investment. It’s not a “set it and forget it” model—operators have to engage in local store marketing, connect with schools, and get involved in the community to build a solid foundation. Smith is interested in partners willing to put in that work, follow guidance, and make the effort.
It’s part of Smith’s efforts to shake the rust off the brand.
“I would just say stay tuned,” he says. “There’s a lot of flavors and excitement. We’ve got some things coming.”