July/August 2007
By Chris PetersenOne of the hallmarks of the Quick-Service, Fresh-Mexican concept - and one of the driving forces behind its recent success - has been allowing customers to watch their meals being made in front of them. Panchero's Mexican Grill takes this concept one step further.
Founder and President Rodney Anderson says it has been a major component of the chain's development.
The humble tortilla is the foundation of Mexican food, and Panchero's places a great deal of importance on it by making it fresh right before the customer's eyes. Anderson says this deceptively simple idea has made Panchero's the go-to place for true burrito connoisseurs and fueled its growth from a "college-town concept" to a restaurant with more the 45 locations in 12 states.
Based in Coralville, Iowa, the chain's first restaurants opened in 1992 in East Lansing, Mich., and Iowa City, Iowa. In 1998, to expand its customer base beyond college students and make the concept more conducive to franchising, Panchero's modified its menu and began serving homemade tortillas that were pressed out with every order. Ingredients were upgraded and the decor updated.
Two years later, Panchero's opened its first suburban location in Iowa in 2000 and customers quickly became accustomed to the freshness and taste of homemade tortillas. The first franchised location opened in Minneapolis in 2003.
Proof Is In The Tortilla
In trying to distinguish Panchero's from the competition, Anderson says, we paid close attention to how other restaurants treated their tortillas. Knowing how important the tortilla is to Mexican food, he says many chains are actually doing damage to the tortillas through their preparation. They were either being grilled or steamed, which makes a big difference in the tortilla's natural moisture.
"When you pull your tortillas out of a bag, people try to steam them: they try to reintroduce moisture to them," Anderson says. "What we do is we make our dough balls in the back and we press them out right in front of the customer," he days. With this process, the natural moisture is retained, and the burritos hold together well. "If you really like burritos, you don't like them falling apart," Anderson says.
Slow-Cooking
"We sell an awful lot of quesadillas, which is another product of doing the tortillas in a restaurant," Anderson says. "We're not just a burrito joint."
Indeed, the menu at Panchero's includes not only burritos and quesadillas but also tacos, fajitas and salads. The chain boasts about the quality of its ingredients, as well, such as its freshly made Guacamole, tomatillo salsa and its marinated and grilled sirloin steak.
Panchero's doesn't rush items onto its menu to keep up with the latest fads, Anderson says. "We're very cautious, work slowly and try to fully test things out."
For example, the company recently spent four months trying to find a supplier for carnitas pork that met its quality standards. This came after Panchero's spent a great deal of time searching for more moist, flavorful chicken. Anderson says the company is testing out new steak marinades right now.
"We don't focus on introducing new items, but rather focus on what we do and how to make it better," he says.
Anderson says the menu, as well as the restaurants' ambiance, attracts customers of all ages and tastes. The restaurant's interiors are designed to be unique and inviting. "We call it a 'warm industrial' look, with wrought-iron railings [and] exposed spiral work," Anderson says and warm colors dominated the look.
Spreading Out
Panchero's is in a growth mode, with more than a dozen locations opening soon and many more in development. Projections call for 100 locations by the end of 2008 with aggressive growth fueled by multi-unit franchise operators, especially those with experience in the restaurant industry. Because of this, Anderson says, the company's biggest challenge right now is finding enough locations to nurture that growth. "Location is so crucial to the success of a restaurant," Anderson says. The typical location is 2,400-square-foot end cap unit in an upscale suburban location with a mix of daytime office and retail traffic. To help the company find such prime locations, Panchero's has a real estate specialist on staff, Anderson says.
The drive for better locations has intensified in recent years as customers have begun to expect more out of quick-service restaurants than what they're typically accustomed to in the fast-food segment. "It's been taken up a notch, whether it's the menu or real estate," Anderson says.
Anderson says Panchero's has 175 stores currently under development across the country, and hopes to have that number up to 250 before long. As for units in operation, Anderson says he expects the chain's size to nearly double in little more than a year. "We should be to about 60 units by the end of this year, hopefully close to 100 by the end of 2008," he says.