After declaring bankruptcy last spring, Tijuana Flats has emerged with a focus on four key areas: people, place, product, and positioning.

The first one starts with turnaround specialist Jim Greco, who was hired as CEO a couple of months after the fast casual announced court proceedings and its transition to new owner Flatheads, LLC. The restaurant veteran was responsible for turning years of sales losses at Sbarro into 19 straight quarters of same-store sales growth and boosting Bruegger’s Bagels’ unit count by 30 percent and building EBITDA by 4x. He also brought on VP of operations Ingrid Hebel, who spent decades at Red Lobster in various leadership roles.

In his brief time at Tijuana Flats, Greco has been instrumental in establishing the second “P”—a new brand positioning around authenticity.

“What we have done is positioned ourselves around the concept of authentic Mexican,” the CEO says. “And in fast casual, that is meaningfully differentiated from our competitors who generally are Tex-Mex or various other forms of Mexican.”

To become worthy of its new branding, Tijuana Flats partnered with a family-owned Mexican food company to formulate new recipes and improve existing ones. One result is Street Tacos and Street Corn, similar foods one would find in Mexico but not too far from what Americans know, Greco says.

Additionally, guest feedback helped Tijuana Flats identify products on the existing menu that were lacking. The chain looked at customer comments from the past several years to pull together common trends that it previously wasn’t listening to, such as updating the rice or changing how it prepares proteins.

“It’s just much better,” Greco says. “In fact, what we have striven for is the idea—just think of it this way—when you bite into something, we want you to say, ‘Wow, that’s really good.’ And that’s what we’ve really focused our efforts on.”

As for the restaurants, Tijuana Flats has three generations of designs in its footprint, and leadership sought to create a new image that incorporated all of them. The chain wanted to find “elements that we think create authenticity and some uniqueness so that the overall experience is one that is really appealing and differentiated,” Greco says. In one example, Tijuana Flats will continue letting guests design individual ceiling tiles and maintain its proprietary hot sauce bar, placing it in the middle of the restaurant. The chain will also continue placing a full wall mural in every store; each piece of artwork is specific to the restaurant’s market.

The fast casual implemented colors from all the generations (brick red, harvest gold, lime green, and some blue), decluttered the dining room, and finished needed repairs.

“Our restaurants probably look more similar now than they have in quite some time because we’ve tried to integrate or rather utilize aspects from all three generations,” Greco says.

In addition to these changes, Tijuana Flats reduced debt and improved profitability. The chain kept vendors it had good experiences with and eliminated obligations to others. In terms of operating costs, the company rightsized the corporate support center.

Additionally, the chain shuttered around 30 restaurants from January 2024 up until the bankruptcy in April. These happened before Greco’s arrival. He believes he could’ve saved some of them.

“Not all of them are units I would have closed,” he says. “Because we’ve been able to make units that were only marginally profitable more profitable by focusing on what we call benchmarking, and that is making sure that all units operate as efficiently as the most efficient units. And by doing that, we’ve been able to improve the overall profitability of units.”

Tijuana Flat’s bankruptcy came after an unsuccessful menu expansion, financial strain, and economic challenges. In 2021 and 2022, efforts to boost revenue through expanded menu offerings backfired. The new items required additional equipment and staffing, resulting in slower service, increased costs, and decreased customer satisfaction. This ultimately led to a drop in sales. In May 2023, lender Truist Bank demanded a $1.2 million interest payment along with $250,000 in quarterly principal payments. These financial obligations depleted the company’s working capital during an already challenging period of rising food and labor costs and shifts in consumer spending.

The chain began exploring strategic options in November 2023, including a sale. This is the second time Tijuana Flats has been sold in its 29-year existence. The other event came in 2015 when AUA Private Equity Partners bought the concept from the founding investor group.

The brand now has roughly 90 corporate and franchise restaurants across Florida, Alabama, North Carolina, Tennessee, Kentucky, and Florida. Tijuana Flats hopes to fill in these areas to further leverage marketing, logistics, and management. In 2024, the fast casual opened three franchise restaurants and one corporate unit. Greco expects a similar growth pattern in 2025.

“Our goal has been to create a brand that’s meaningfully differentiated, where guests have a memorable experience, and we believe that these new products—these Street Tacos, Street Corn—and the improvements that we’ve made in our existing products are really ‘wow,'” Greco says. “We think the environment that we’ve created in our restaurants is really conducive to visiting and lingering—that’s another one of our goals. So we think that the combination of those things together with our exceptional hospitality really creates something that’s meaningfully different in fast-casual Mexican … It’s a much better quality product than is otherwise out there and much more flavorful. And it’s a great environment. So we think we’ve really created something that will resonate with guests.”

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