A New Taste For Franchising

Taco Del Mar shifts strategy

SEATTLE (Friday, April 30, 1999) - Local Mexican fast-food chain Taco Del Mar continues to sprout new stores, but the balance is shifting from primarily company-owned units to franchises. By the end of the year, the company expects the number of franchised units to surpass the company-owned stores, said co-owner James Schmidt.

Seattle-based Taco Del Mar ended 1998 with 48 stores -- a jump from 35 stores in 1997 -- and expects to rise to 56 within the next few months, Schmidt said. In all, roughly 20 new stores are slated to open in 1999, bringing the company close to 70 units by year-end. The company currently owns 28 of the outlets.

Corporate stores are scheduled to open in the next few months in the Bellevue Galleria, Federal Way, Southcenter and Puyallup, along with a Portland store. An opening in Yakima will be the first Taco Del Mar in Eastern Washington.

Along with those openings will be the first two from a Snohomish County franchisee that plans to open at least eight stores in his territory, said Schmidt. Those franchised units are preparing to open in Bellingham and Lynnwood.

Unlike many national chains, which offer franchisees merely a location -- and no guarantee that they won't sell another franchise across the street -- Taco Del Mar is selling franchise territories. The territory system allows franchisees free rein to put as many or few units within their territory as they want, without fear that another company franchisee will set up shop nearby.

Taco Del Mar wanted to structure its franchising in this fashion to be fairer to franchisees, and also to avoid getting into "the business of selling franchises, instead of the business of selling burritos," said Schmidt. "For us, it's the burrito, stupid."

With the rise in franchised stores, Taco Del Mar beefed up its staff over a year ago with the addition of Kevin Hanson as director of franchises and Jim Tarte as controller.

The chain saw its sales rise from $9 million in 1997 to nearly $11 million in 1998.

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