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23rd February 2022

Taco Cabana in QSR Magazine

Under New Ownership, Taco Cabana Puts Tex-Mex at the Forefront

The chain believes it can reach 1,000 stores in the next decade. 

Taco Cabana taco selection.

Taco Cabana

The chain is upgrading its website/app and launching a store prototype. 

Anil Yadav has spent more than three decades building his franchising empire.

His legacy, Yadav Enterprises, oversees 343 restaurants across six brands in the casual-dining and quick-service segments—Jack in the Box, Denny’s, El Pollo Loco, Corner Bakery Cafe, Sizzler, and TGI Fridays.

But Yadav, who is also a significant investor in TGI Fridays’ ownership group, has been eager to play in a different, bigger sandbox.

That turned out to be Taco Cabana, which the franchisee purchased for $85 million from Fiesta Restaurant Group last year. Not only is Yadav now a full-fledged franchisor, but he’s also the leader of a progressing turnaround effort.

The goal in the next five to 10 years is to expand outside of Texas and surpass 1,000 units. Currently, the company owns 142 stores in Texas, and one franchisee operates six units in New Mexico.

“I loved everything about the brand,” Yadav says. “I mean of course the brand is a great legacy, been around the Texas market for 35-plus years as a regional brand, but has the ability to be a national brand.”

Taco’s pandemic recovery hasn’t been as swift as others in the quick-service space. In the second quarter of 2021, same-store sales dropped 6.7 percent, including declines of 6.9 percent, 6.7 percent and 6.5 percent in April, May, and June. Even before COVID, comps decreased 4.1 percent in 2019 year-over-year.

The first step toward revitalizing the brand and developing a new franchise program was creating a self-sufficient and independent headquarters in San Antonio, according to COO Ulyses Camacho. Once that was established, the fast casual conducted research to define its brand identity, which dates back nearly 45 years.

Internally, the brand completed a SWOT analysis (strengths, weaknesses, opportunities, and threats) and pored over decades worth of archives. Externally, Taco initiated an attitude, awareness, and usage study, to gain a better understanding of where it stands in the marketplace.

The fast casual realized Tex-Mex is its foundation and should be the starting point of all key decisions.

“That has taken place in the last six months,” Camacho says. “Once we understood all the points that we described, then we started working with research and development, strategy, marketing to really start creating filters so that everything that we do, it’s true to our roots—not only to retain the existing customer, but to gain new customers, new generations.”

The re-emphasis of Tex-Mex started with menu innovation. This includes Beef Picadillo Flautas, Shrimp Tampico with pineapple chipotle salsa, white queso, and jalapeño salsa. Taco will also continue to innovate around its alcoholic beverage lineup, such as the peach margarita and a special flavor for Cinco de Mayo.

To meet demands of long-time customers, the restaurant is bringing back many original recipes and popular items, like the Salsa Fuego and Salsa Ranch, a variety of enchilada flavors, and the relaunch of burritos for breakfast, lunch, and dinner.

“The brand is going to need foundation,” Yadav says. “I mean we have unique high-quality ingredient and product that we get a lot of credit for, and I think theres a lot of opportunity to bring back the core product that really did well from the quality. There’s a lot of research and development. We have been putting our culinary department to the highest task to come back and really bring back what Taco Cabana was known for.”

Beef flautas

Breakfast burrito

Salsas

Shrimp Tampico

Taco cabana restaurant exterior

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