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Taco Cabana

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Taco Cabana
Company typeSubsidiary
IndustryRestaurant, Food
GenreFast Casual
Founded1978
FounderFelix Stehling
Headquarters
San Antonio, Texas
,
United States
Number of locations
166 company-owned restaurants
Revenue297,470,000 United States dollar (2019) Edit this on Wikidata
ParentFiesta Restaurant Group, Inc
Websitetacocabana.com

Taco Cabana is an American fast casual restaurant chain specializing in Mexican cuisine. A wholly owned subsidiary of Fiesta Restaurant Group, Inc, it is headquartered in San Antonio, Texas. As of September 2014 Taco Cabana had 166 locations throughout Texas, Oklahoma and New Mexico.[1]

Most Taco Cabana restaurants have a drive-thru and many are open 24 hours a day. For most of the chain's history all locations were painted in the company's signature pink. Taco Cabana is known for its interior, semi-enclosed and patio dining areas. Most menu items are handmade daily on site in open display cooking areas including fajitas on an open-flame grill and tortillas made in-house.

History

Taco Cabana was founded by Felix Stehling in September 1978 with its first restaurant at the corner of San Pedro and Hildebrand Avenue in Midtown San Antonio.[2] Stehling purchased a vacant Dairy Queen because the family needed additional parking space for their popular bar across the street, the Crystal Pistol.[3] Stehling decided to open a taco stand. The open-air design of the existing structure led to the "patio cafe" concept that defined the chain's subsequent locations. Felix Stehling's wife, Billie Jo Stehling, created the décor and interior theme for the restaurant chain.[3] After finding all of the patio furniture stolen following the first night of business, Stehling decided to keep the place open 24 hours and the around-the-clock service concept began.[3]

The restaurant focused on fresh foods, rather than pre-packaged or pre-prepared foods. The restaurant served beer and margaritas inside while offering the convenience of a drive-thru for takeout orders. With a rapidly growing concept, Stehling needed help running his new chain. Stehling decided to keep the business in the family and asked his two brothers to help expand the chain throughout San Antonio. The brothers expanded the chain in the early stages of their partnership. In 1986 the brothers left the company in Felix's hands after differences in vision for the restaurant concept's future.

In 1987, after his brothers left, Stehling hired Richard Cervera as executive vice-president of Taco Cabana. In 1990, Taco Cabana began expansion into neighboring states and continued its growth throughout Texas. Cervera moved up to president of the company in mid-1990 and began his plan for franchising the fast-casual concept. In 1992 Taco Cabana, with several substantial franchising agreements, went public with its first stock offering.

In the late 1980s and early 1990s, the success of Taco Cabana encouraged imitators such as Two Pesos. In January 1987 Taco Cabana filed a suit against Two Pesos for allegedly duplicating Taco Cabana’s “Trade dress” and for theft of trade secrets. Two Pesos lost the case and appealed the ruling all the way to the Supreme Court. In 1992 the Supreme Court ruled in favor of Taco Cabana and awarded the company $3.7 million in damages.

In January 1993 Taco Cabana announced that it was purchasing cash strapped Two Pesos' restaurant assets in exchange for 940,000 shares of Taco Cabana stock, approximately valued at $22 million.[4] The sale included all 38 company-owned restaurants as well as all 51 franchised or licensed restaurants, operating under the Two Pesos and Shortstop Hamburgers names. Taco Cabana converted most Two Pesos locations into Taco Cabana restaurants, closed others and sold the Shortstop Hamburger chain.

Taco Cabana sales hit a high in 1994 with the success of the acquisition and protection of its niche in the restaurant market. In 1994, Stehling decided to resign as chairman and was succeeded by Cervera. Despite the rise in revenues the company saw while Cervera was in charge, stock prices for Taco Cabana drastically dropped. Stockholders blamed Cervera and wanted him replaced. In 1995 Cervera resigned as president of Taco Cabana for a position with the House of Blues restaurant chain. Stephen Clark was appointed both COO and president that same year.

Clark had over 15 years experience in the food industry. Clark began a comprehensive evaluation of Taco Cabana's operations. Clark brought on his own management team to help him update the brand's marketing strategy. He closed several of the company-owned restaurants, restructured a lot of the franchisee debt, eliminated many non-restaurant related assets and slowed plans for further expansion of restaurant or new franchise agreements.

Towards the end of 1996, Taco Cabana introduced a new type of restaurant to the Dallas-Fort Worth area. It featured a rounded front, clay tile roofing, aged wood paneling and stainless steel counter tops. The layout was intended to give the customers a feeling be dining in an old Mexican cafe. The new design worked, attracting more customers than before. Plans were laid to build a series of these new designs for the fast-casual chain across Texas. During this time, profit margins and employee accountability improved proving Clark had achieved a more efficient operating system.

By 2000, Taco Cabana had spent almost $30 million on upgrades to the brand's image. However, despite the improvements and continuous growth in profits, stock price remained low. Clark began looking for options for Taco Cabana.

In 2001 the company became privately held as a wholly owned subsidiary of Carrols Restaurant Group, one of the largest Burger King franchisees and owner of Pollo Tropical. After the acquisition, Clark left the company.

Mike Biviano, an employee of Carrols Restaurant Corp. since 1973, succeeded Clark as the Regional Director of Operations and Executive Vice President.

Taco Cabana continued to grow and in 2001 introduced its Mexican grill concept including made-to-order grilled beef, chicken, pork and shrimp that remain a staple on the menu today.

Throughout 2002, Taco Cabana showed its ability to be successful by contributing to a 41 percent revenue gain for Carrols Restaurant Corporation. During this year, the fast-casual chain introduced flautas to the menu as a limited time offer. The item proved to be very popular among Taco Cabana fans and set the restaurant apart from competitors. Flautas were added as a permanent menu item following the success.

In 2003 Taco Cabana celebrated its 25th anniversary. The restaurant chain began creating a new restaurant prototype to give Taco Cabana featuring eight-foot char-grills in all restaurants. During the 2003 restaurant updates Taco Cabana opened nine new restaurants.

In addition to the renovations, Taco Cabana introduced the "premium bowl" promotion as a precursor for potential bowls and salads to add to the menu. This item later became the Cabana Bowl that is on the menu today.

Taco Cabana began forming the brand image of fresh made food and its San Antonio heritage in an effort to boost the brand to higher standards in the quick service industry in 2004. Magnetic menu boards were added to the restaurants and the new design changes began taking place including new artwork and furniture.

In April 2004, Taco Cabana introduced the Dozen Breakfast Tacos Box to the menu as a different approach for the brand to market their breakfast in a more convenient way for guests. This promotion was so effective the deal was added as a permanent menu offering.

From 2004 through 2005 Taco Cabana added five more restaurants to operate more than 120 locations. The fast-casual chain saw a positive increase in overall growth for the brand and ended with a record year. During 2006 through 2010, differences in operations, leadership and opinions lead Taco Cabana to a lot of new product testing including the Shrimp Tampico limited time offer and grilled Pupusa.

During the Great Recession, Taco Cabana tried to retain more customers, improve quality and elevate brand image. Taco Cabana rolled out the “Cabana Cares” program that was geared towards helping improve individual restaurant operations by acquiring guest surveys for each restaurant. The fast-casual Mexican chain created the “Welcome to the Great State of Cabana” passport loyalty program in the summer of 2008 as a way to connect more with their customers and elevate the customer experience. The goal of the program was to encourage high service, order efficiency, great quality food and high environment standards to create a place where customers could escape and relax.

Taco Cabana today

A Taco Cabana location in Dallas, Texas.

Taco Cabana launched their Facebook page in December 2007. The company officially launched with Twitter page in March 2009 followed by Taco Cabana on Instagram in January 2013.

Over the past few years Taco Cabana has seen added many guest favorite items to the menu permanently including steak street tacos added in December 2010, brisket tacos added in April 2011, sopapillas and flan in June 2011, and shrimp in February 2013.

In July 2012, Taco Cabana began renovating their restaurants. The new design features decorative metal "estrella" (star) lights hanging from the ceiling, papel picado accents throughout and large street-life photos from Mexico decorating the walls. The company is currently updating most of its existing locations starting in October 2012 in Dallas, then Austin, San Antonio and Houston. Taco Cabana plans to be completed with the restaurant redesigns in early 2014.

Charity work

Since Taco Cabana's home town of San Antonio has a military background, the company has always taken an active role in helping give back to the families and people who serve and are based in that city.

For several years, Taco Cabana has regularly hosted events to benefit the Warrior and Family Support Center, a national rehabilitation center for wounded military located in San Antonio at the Brooke Army Medical Center, including employees volunteering regularly to help cater lunch or dinner for those at the center.

For the past three years, Taco Cabana has hosted the Taco Treat fundraiser for the WFSC. The Taco Treat fundraiser offers guests a booklet of five coupons for free bean and cheese tacos in exchange for a $2 donation benefiting the WFSC.

Donations to WFSC help provide summer and winter camps to children of wounded military personnel, as well as other diapers, formula, and other necessities to be shared by Families and Warriors.

In addition to helping out the WFSC, Taco Cabana currently offers a 20 percent discount to anyone carrying a valid military ID or wearing a uniform.

Fiesta Restaurant Group

In 2011, Carrols Restaurant Corp. announced its intentions of separating its Hispanic brands and Burger King restaurant business into two separate public companies. The Hispanic brands were placed under Fiesta Restaurant Group, the new subsidiary of Carrols Restaurant Corp. With a combined revenue of $439.1 million in 2010, Fiesta Restaurant Group was in a perfect position to become a subsidiary for the time being.

In August 2011, Carrols Restaurant Corp named Tim Taft the CEO of Fiesta Restaurant Group. Taft succeeded Alan Vituli who remained on as Chairman of the Board of Directors for Fiesta Restaurant Group. Previously serving as President and CEO of Whataburger, Inc. for more than 10 years and most recently interim CEO for Souper Salad, Inc., Taft has more than 30 years of experience in the restaurant industry making him a great fit to take over Fiesta Restaurant Group.

Soon after the announcement of the new CEO, Fiesta Restaurant Group announced Joe Brink as the Vice President of Supply Chain Management. With more than 20 years experience in supply chain management, Brink was more than qualified for the job. He was most recently Vice President of Supply Chain Management at Souper Salad, Inc.

By the time the separation of the brands was complete in 2011, Fiesta Restaurant Group saw an 8.2 percent revenue increase for the year and finished at $475.0 million in 2011.

In April 2012, Carrols Restaurant Corp agreed to allow Fiesta Restaurant Group to spin-off with Taco Cabana and Pollo Tropical. The spin-off was completed on May 8, 2012.

Fiesta Restaurant Group, Inc went public on NASDAQ under the symbol FRGI on May 8, 2012. Currently Fiesta Restaurant Group owns, operates and franchises 284 restaurants in the southern United States, the Caribbean, Central America and South America.[5]

In December 2012, Fiesta announced that would be moving the location of their headquarters to Addison, Texas. With plans to grow substantially over the next 2 years, the company needed more space. The new headquarters is located at 14800 Landmark Boulevard.

In February 2016, Fiesta announced that it would split its two brands, Taco Cabana and Pollo Tropical, into two separate companies.[6]

Corporate affairs

The company headquarters is in 17,700 square feet (1,640 m2) of office space in Suite 200 of the 8918 Tesoro Drive building in Uptown San Antonio, Texas.[7]

See also

References

  1. ^ "Company Information". Retrieved 2014-12-24.
  2. ^ Morton, Neil (2012-12-11). "Stehling, Taco Cabana founder, dies at 87". San Antonio Express-News. Retrieved 2013-01-05.
  3. ^ a b c Ayala, Elaine (2011-05-09). "Stehling created Taco Cabana décor". San Antonio Express-News. Retrieved 2013-01-05.
  4. ^ Ruggless, Ron (January 25, 1993). "Taco Cabana buys rival Two Pesos". Nation's Restaurant News.
  5. ^ "Fiesta Restaurant Group Stock Data". Retrieved 2014-12-24.
  6. ^ "Fiesta Restaurant Group to split brands into separate businesses". Retrieved 2016-02-26.
  7. ^ "Carrols Restaurant Group, Inc. 2010 Annual Report." Carrols Restaurant Group. 38. Retrieved on February 2, 2012. "In addition, we lease approximately 17,700 square feet of office space at 8918 Tesoro Drive, Suite 200, San Antonio, Texas, which houses most of our administrative operations for our Taco Cabana restaurants."
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