A new look for Taco John’s is part of what drew Meritage Hospitality to the brand.
Brooks Speirs has big plans for Taco John’s, where he is vice president of development for the fast-food Mexican chain. “We want to be, beyond a doubt, the number two player in the industry,” he declared.
While several regional and super-regional chains compete for customers, no clear rival exists for Taco Bell, the dominant fast Mexican concept with more than 7,000 stores. Taco John’s, with 390 stores, aims to be that competitor.
Inked last August and the largest in its 50-plus year history, Taco John’s 50-unit development agreement with Meritage Hospitality Group suggests the company is moving in the right direction. With more than 340 Wendy’s restaurants, Meritage is that brand’s largest franchisee.
With plans to open 50 Taco John’s and the option to build 150 more, it’s well on its way to becoming one of the biggest franchisees in the Taco John’s system.
“Meritage is one of those franchisees that everyone wants to land,” said Taco John’s CEO Jim Creel. He sees the Meritage deal as proof the company’s multi-year effort to create the “new Taco John’s” is working.
That effort began several years ago when a generational change in ownership brought a new appetite for growth to the company. The company streamlined its menu, improved its operations and unveiled a new store design.
The goal was twofold: improve the company for its own sake, and improve it to the point where large franchisees such as Meritage, which have the financial and operational wherewithal to grow the brand quickly, will want to partner with the company.
“We really, really liked the building,” said Gary Rose, president and chief operating officer of Meritage. They’re “sleek, efficient and we think we can produce them quickly.” And it was an article about the new design, seen by chance by an executive at Meritage, that put Taco John’s on Meritage’s radar.
Gary Rose
Meritage’s opening plans have been slowed, somewhat, by congestion in the economy. It pared back its 2022 store opening plans from six to eight to three or four. “A lot of municipalities don’t approve them immediately,” said Rose. While 2022 plans have been impacted, he said they’re working hard to build a robust pipeline for 2023, and aim to open 20 restaurants in that year.
The development agreement covers states including Michigan, Ohio, Indiana and Oklahoma, which Rose said overlaps well with the 16 states where Meritage already operates. It’s a significant geographic expansion for the Wyoming-based brand, too. Taco John’s is concentrated in the western half of the Midwest. Meritage plans to open its first Taco John’s location near its headquarters in Grand Rapids, Michigan.
As the largest franchisee in the Wendy’s system, Rose figured the company was running out of space to grow with the brand. Meritage has 345 Wendy’s restaurants and did just under $600 million in revenue last year. But Rose has big plans.
He hopes to build Meritage into a 600-unit, $1 billion revenue company by 2026, so stopping wasn’t an option. Taco John’s and its bounty of white space is a crucial part of Meritage’s growth plan.