Case Study: Taco John's Cheyenne, Wyo.

One of the country's largest quick-service Mexican food chains, Taco John's came from what many would consider to be the humblest of beginnings.

Taco Johns 6With its most recent interior renovation, Taco John’s offers three styles that incorporate clean lines, bold colors and a mixture of seating types.The chain's cofounders, James Woodson and Harold Holmes, were trailer manufacturers who purchased the franchise rights to a taco restaurant. The duo reintroduced the concept as a mobile Mexican food trailer in 1969. "The chain started as a 20-foot-by-30-foot walk-up trailer," says Dan James, Taco John's chief development officer. "The owners could easily move the trailer to a new town if sales projections weren't being met."

After finally opening a brick-and-mortar site in Cheyenne, Wyo., the chain's footprint continued to grow across the Midwest to what is now 400 mostly franchised Taco John's in 25 states. Its sales in 2013 were estimated at more than $330 million by Technomic. "We've gone from being a walk-up business to a full QSR Mexican concept," James says. "That's what makes us unique."

While a following of loyal customers drove past growth, a corporate initiative toward modernizing the brand from the outside in will drive this round of expansion. In 2006 the chain underwent a full exterior remodel of 390 out of 405 restaurants. The more modern look incorporates bright reds and yellows, a wraparound awning, stone accents and gooseneck lighting.

This past February, the chain announced an interior renovation initiative that incorporates two cost-effective streamlined designs for its sit-down and drive-thru focused footprints. "Previously, the decor took a more localized approach, with a Taco John's in Iowa appearing different than a neighboring store 100 miles away," James says. "Now the goal is to create a consistent look and feel throughout the brand."

Launched in conjunction with a rebranding campaign and new tagline, "Unwrap the Original," three distinct interior styles will be available for franchisees to choose from. These incorporate clean lines; bold green, orange and red colors throughout; and a mixture of booths, tables, tall boys and counter seats. Taco John's is also testing new menu boards at its locations.

The menu stays true to Taco John's heritage and centers around its tacos, Mexican Baja Wings and popular "potato olés," which are mini hash brown rounds with spicy seasoning. Like the chain's brand, Taco John's menu continues to evolve to keep pace with consumer preferences. Last spring, the company partnered with PepsiCo's Frito-Lay division to launch the Flamin' Hot Cheetos Burrito. This limited-time offer includes spicy chorizo sausage, jalapeno slices, nacho cheese and chile de árbol salsa along with Flamin' Hot Cheetos inside a fiery tortilla. Another successful addition is the Spicy Chorizo Breakfast Burrito, made with spicy chorizo sausage, jalapenos, eggs and salsa.

As in most Mexican-themed restaurants, Taco John's food prep represents a significant ingredient in the chain's value proposition. For this reason, the majority of activity centers on a long production table. "This is the one real key piece of equipment and where nearly all of our menu is being produced," James says.

Taco John's is testing a smaller 8-foot production table, which will offer substantial savings in both cost and space. Culinary staff use a grill at the end of the table to heat tortillas and a fryer to cook the potato olés, which are held in a food warmer.

As with all QSRs, Taco John's equipment must enhance speed of service. "Units have to support our menu and work efficiently for our operators to serve all of our menu items as quickly as possible," James says. "Secondly, equipment must be cost efficient. One of the reasons we're looking for a smaller production table is that we should be able to save a few thousand dollars on the initial cost of the centerpiece of our equipment package."

Leveraging its updated design, Taco John's strives to be as cost efficient as possible, which is essential in today's competitive Mexican foodservice segment.

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