Del Taco

Del Taco Holdings, Inc.
Public
Traded as NASDAQ: TACO
Industry Restaurants
Founded September 16, 1964, Yermo, California[1]
Founder Ed Hackbarth and Evan Williams[1]
Headquarters Lake Forest, California, U.S.
Number of locations
 547 (As of March 23, 2014)[2]
Key people
 Paul Murphy (CEO)
Website deltaco.com

Del Taco is an American quick service restaurant chain which specializes in American-style Mexican cuisine as well as American foods such as burgers, fries, and shakes. Del Taco is led by Chairman and CEO Paul Murphy,[3] and is headquartered in Lake Forest, California.[4]

History

1960s

Del Taco's headquarters (2013)

The first Del Taco restaurant opened in Yermo, California on September 16, 1964 by Ed Hackbarth and David Jameson.[1] On the first official day of business, Del Taco made $169.[1] Success of the first restaurant led to two in Barstow, one in Needles, and a fifth restaurant in Corona (the first Del Taco with a drive-thru window). Dick Naugle, who installed the kitchen equipment in the Corona store, was impressed by the design and joined Hackbarth and Jameson in the fledgling business. In 1966, the trio founded Red-E-Food Systems, Inc. with the idea of franchising the Del Taco brand.[5] That same year, the original Del Taco sun logo was created and in 1967, Del Taco introduced their famous bean and cheese burrito with green or red sauce to their menu.[1] Before long, the restaurants were being founded throughout Southern California.

1970s

Del Taco history

Naugle left the company early in the decade to start his own Mexican fast food chain, Naugles. In 1973, the company dropped “Casa” from its name and Red-E-Food Systems became Del Taco, Inc. By that time, the company was enjoying a remarkable growth spurt; during one period, they were opening a new restaurant every month. However, in 1976, Hackbarth and Jameson sold Del Taco to a group of investors. The new owners sold the exclusive rights to use and develop the Del Taco name throughout the United States (excluding California; Eugene, Oregon; and Yuma, Arizona) to W. R. Grace and Company. Grace, primarily a chemicals company, founded a new company, Del Taco Restaurants Inc. of Dallas, Texas, and a new subsidiary, DTG Inc., to oversee the various fast food chains it was acquiring.[5] Nonetheless, the franchise continued to expand. In 1977, there were 50 Del Taco restaurants. A year later in 1978, there were 100.

1980s

In 1981, Del Taco had roughly 350 restaurants (still located almost exclusively to California).

In February 1989, Del Taco merged their restaurants with the 171 Naugles’ Mexican fast food outlets. Anwar Soliman was the man behind the move and was, ironically, the mastermind behind the purchase of the rights to expand Del Taco throughout the United States back in 1977.[5] With the merger, Del Taco increased in size, and spread as far east as Hickory, North Carolina. The 1980s also brought change in the operation, as Del Taco began to stay open all night long.[1] In Lake Forest, California, where the chain is currently headquartered, there are two Del Tacos directly across the street from each other on Trabuco Road - one of these having formerly been a Naugles.

1990s

Del Taco's logo from 1992 to 2011

In 1990, Kevin K. Moriarty joined Del Taco as the new CEO, soon becoming the owner of the brand in conjunction with his management team. His team launched new efforts to grow the brand’s image while improving the total customer experience, setting the stage for extreme growth.[1]

In 1992, Del Taco recaptured exclusive rights to its name from W. R. Grace and Company and was now able to expand outside of California.[6] Del Taco launched a $14 million program to redesign its restaurant exteriors, kitchens, and corporate logo. The company presented its Concept 2000 restaurant design and in August 1992 introduced its new logo. In place of the old orange and blue sunset, there was a yellow sun that rose over green mountains against a red background; these colors represented the primary ingredients of Del Taco food: cheese, lettuce, and tomatoes. Later that year, executives announced far-reaching plans to expand the chain to 500 stores by 1995 and to add another 225 by 2000. The first new markets it set its sights on were Las Vegas, Nevada; St. Louis, Missouri; and the Northeast Corridor.[5]

Del Taco filed for protection in 1993 under Chapter 11 in U.S. Bankruptcy Court. In spite of the fact that renovations were made to keep Del Taco profitable, the company continued to pay rent on several unprofitable outlets that had already been closed. They also attempted to negotiate lease reductions on a number of other high cost sites. To make matters worse, Del Taco had been hit with a $3 million lawsuit from a former supplier, which was later settled out of court.[5]

From 1994 through 1998, Del Taco saw their company decrease and eventually increase in size. Though the company signed a deal to open 15 franchise stores in the Northeast with many more in the Southeast, the chain was nowhere near the goals publicized years earlier. In 1995, Del Taco (hurt by the closing of numerous unprofitable units) had only 300 stores, instead of growing to 500 stores. However, the chain began to prosper in 1997, when their total sales had reached an estimated $250 million. By December 1998, Del Taco boasted 325 stores in twelve states and hoped to be debt-free by 2002.[5]

2000s

By 2000, Del Taco had 372 stores located in ten U.S. states. That year, an important deal was signed with the Compass Group PLC that enabled Del Taco stores to open on American military bases. The first to do business was the store at Patuxent River Naval Air Station in St. Mary's County, Maryland, in early 2001. Other Del Tacos were planned for American bases in Puerto Rico and Naples, Italy.[5]

In early 2001, a group of former Del Taco employees, all of whom were black, brought a discrimination suit against the chain. The group claimed that while working at Del Taco in the Los Angeles area, they had suffered verbal abuse, had been passed over for promotions in favor of Hispanic workers, and were being fired and replaced by illegal immigrants. The case had not been settled.[5]

In an effort to improve its reputation, Del Taco launched a sports-sponsorship program with teams in eight U.S. states, including the Mighty Ducks of Anaheim and Arizona Coyotes hockey teams, basketball’s Los Angeles Clippers and Utah Jazz, the University of Nevada, Las Vegas’s football and basketball teams, and several minor league hockey and baseball teams. The deal placed the Del Taco logo on signs, drink cups, and special promotional items at the stadiums of the partner teams. It paid off as, in 2003, Del Taco announced that their restaurants had topped $1 million per store in average annual sales, which was remarkable considering that other American stores, notably McDonald’s and Carl’s Jr., featured a decrease in annual sales.[5]

In 2004, a private Nashville, Tennessee based holding named Sagittarius Brands, LLC, which is also the parent company of Captain D's Seafood, purchased Del Taco.

In January 2008, Del Taco announced the opening of its 500th restaurant in Burbank, California.[7] On April 27, 2009, a new Del Taco opened in Oviedo, Florida, marking the first time since the 1980s that Del Taco was available in the Orlando area, this location has been closed since. However there are two other Orlando locations still open.[8]

2010s

Del Taco in Denton, Texas opened in 2010.

Del Taco returned to Texas with a new location in Denton, Texas, north of Dallas. W. R. Grace and Company had previously owned and operated locations in Texas with a licensing agreement in 1978, but sold the restaurants to Taco Bell in 1992.[9]

Guillermo Perales, one of the largest Hispanic restaurateurs in the nation, signed a franchisee agreement in 2011 to open additional locations in the Dallas-Fort Worth area of Texas.[10]

In March 2012, a location opened in Houston with plans for further expansion in the greater Houston area (but that location went out of business by May 2015),[11] including both Harris County and Montgomery County.[12]

In December 2012, a new Del Taco location opened in Cedar Park, Texas. In 2013, a new location opened in Round Rock, Texas.

In December 2013, Del Taco made its entrance into Oklahoma, opening its first store in Moore, OK, a suburb of Oklahoma City. In the summer of 2014 they opened their second store in Edmond, OK, also a suburb of Oklahoma City.

Del Taco was purchased by Levy Acquisition Corporation and became a public company on June 30, 2015.[13]

Demographics

The chain operates in 17 states in the U.S, with the majority of their restaurants in the West Coast states (California, Oregon and Washington) or in seven other western states (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico and Utah).[14] There are also multiple Del Taco restaurants located in the Detroit region.

Las Vegas, Nevada has the most Del Tacos of any single city[15] and California has the most Del Tacos of any single state.[16]

Products

Del Taco serves two different types of food: Mexican and American. Their standard menu includes Hard Shell Tacos, Soft Tacos, Burritos, Quesadillas, Nachos, Deluxe Taco Salad, Crinkle Cut French Fries, Chili Cheddar Fries, Double Del Cheeseburger, Bacon Del Cheeseburger, Triple Del Cheeseburger, Fries, Shakes, and at least four types of Dinner Burritos.[5]

Marketing

The first mascot of Del Taco was a character of the same name used from 1999 through 2000. While popular, Del Taco (the company) was hit by a lawsuit from Zorro Productions, Inc. and Tristar Pictures, Inc., who claimed that the "Del Taco" character – masked and costumed in black – infringed on their rights to the trademark Zorro figure. Del Taco settled the suit in January 2000, agreeing to make changes to the Del Taco character, but soon discontinued the ad campaign altogether.[5]

In its place, from 2000 through early 2006, Del Taco used Gregg Binkley to play "Dan" in their commercials. Dan, a clumsy marketing spokesman for Del Taco, was famous for his antics during their commercials. Among other things, Dan destroyed cars, broke hockey-rink glass, and mistakenly held a sales event at a nude beach, all while promoting a specific item for Del Taco.[17]

From August 2007 through July 2008, Del Taco featured "The Beast" in their commercials. "The Beast", a personification of hunger, typically stood next to a customer and persuaded him to order a particular item (or particular items) so that they could "Feed the Beast" (which was Del Taco's slogan at the time). "The Beast" made his debut in August 2007 promoting Del Taco's improved Chicken Soft Taco. In addition, he endorsed the Crispy Fish Taco in February 2008, the improved Chicken Quesadilla (with 50% more chicken) in April 2008, and Del's Deal (two half-pound bean and cheese burritos, a regular crunchy taco, and a small drink for $2.99) in June 2008.[18]

Currently, Del Taco uses a variety of commercials to promote their new slogan, "Go Bold or Go Home." The first commercial featured a team of miniature "Mole Men" to promote the Spicy Chicken Mole Soft Taco, which aired in August 2008. Ads included Del Taco's promotion of their improved regular taco in September 2008, the Classic Combo Deal in November 2008, three separate meal deals for under three dollars (including the aforementioned deal) in January 2009, the crispy shrimp taco in February 2009, the chicken soft taco in April 2009, and the chicken fajita burrito in June 2009.[19][20][21][22]

References

  1. 1 2 3 4 5 6 7 "Del Taco - History". Del Taco. Retrieved July 11, 2014.
  2. ↑ "Del Taco Distinguishes Top Franchisees". Del Taco. Archived from the original on June 18, 2011. Retrieved June 27, 2011.
  3. ↑ "Einstein Noah Restaurant Gro (BAGL:Consolidated Issue Listed On NASDAQ Global Market)". Bloomberg Businessweek. Retrieved July 11, 2014.
  4. ↑ "Feedback". Del Taco. Archived from the original on March 8, 2010. Retrieved February 25, 2010.
  5. 1 2 3 4 5 6 7 8 9 10 11 "Del Taco, Inc. History". FundingUniverse. Archived from the original on January 22, 2012. Retrieved June 27, 2011.
  6. ↑ Woodyard, Chris (July 28, 1992). "Bidding for a Bigger Bite". Los Angeles Times. Retrieved April 30, 2010.
  7. ↑ "Del Taco Opens 500th Restaurant". QSR Magazine. Journalistic, Inc. January 8, 2008. Archived from the original on 2008-01-14.
  8. ↑ Collings, Buddy (April 8, 2009). "Local varsity athletes juggle bases, turf". Orlando Sentinel.
  9. ↑ Woodyard, Chris (April 4, 1992). "Del Taco--Not That One--Is Sold". Los Angeles Times. Retrieved April 30, 2010.
  10. ↑ Robinson-Jacobs, Karen (February 25, 2011). "Franchisee will open Del Tacos in Dallas-Fort Worth area". Dallas Morning News. Retrieved July 13, 2011.
  11. ↑ Kearney, Syd (2015-05-21). "Del Taco closes its only Houston area store". Houston Chronicle. Retrieved 2015-05-24.
  12. ↑ Morago, Greg (2012-03-27). "Houston's first Del Taco opens March 28". Houston Chronicle. Archived from the original on 2012-03-28. Retrieved 2012-09-13.
  13. ↑ Luna, Nancy (June 30, 2015). "1,500 more Del Tacos: Deal with Larry Levy finalized – with big expansion plans". The Orange County Register. Retrieved 2015-07-22.
  14. ↑ "Locations". Del Taco. Retrieved June 27, 2011.
  15. ↑ "Del Taco Demographics". Del Taco. Archived from the original on June 18, 2011. Retrieved June 27, 2011.
  16. ↑ "Demographics". Del Taco. Archived from the original on June 24, 2011. Retrieved June 27, 2011.
  17. ↑ Lansner, Jonathan (March 2, 2007). "Del Taco Dan's demise was destiny". The Orange County Register. Retrieved June 27, 2011.
  18. ↑ Luna, Nancy (February 21, 2008). "Del Taco's latest Beast ad dubbed 'Annoying'". The Orange County Register. Retrieved September 13, 2012.
  19. ↑ "Three is Better at Del Taco! New $3 Meals Offer Value, Taste And a Drink" (Press release). Reuters. January 13, 2009. Archived from the original on 2012-11-14. Retrieved June 27, 2011.
  20. ↑ "Del Taco's Bringing Shrimp Back" (Press release). Reuters. February 25, 2009. Archived from the original on 2012-11-14. Retrieved June 27, 2011.
  21. ↑ "Del Taco adds chicken soft taco, burrito value promos" (Press release). QSR Web. April 24, 2009. Archived from the original on 2009-04-27. Retrieved June 27, 2011.
  22. ↑ "Del Taco Introduces New Customizable Chicken Fajita Burrito" (Press release). Reuters. June 15, 2009. Archived from the original on 2012-11-14. Retrieved June 27, 2011.

External links

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