Fiesta Restaurant Group Inc. has scuttled plans to divide its Pollo Tropical and Taco Cabana brands, and has named Pollo Tropical COO Danny Meisenheimer as interim CEO, the company said Tuesday.
Fiesta’s board said it was halting plans to separate the fast-casual brands into two companies, which had been announced in February. The company also said it will suspend further development of Pollo Tropical in Texas.
“Taking into account the current challenging market conditions, the board has reevaluated the previously announced separation of Taco Cabana and concluded that continued brand ownership is in shareholders’ best interest,” the company said in a statement.
Jack A. Smith, Fiesta board chairman, said “persistent, challenging market conditions” in the restaurant industry, as well as investor feedback, led to the decision to keep both brands under one ownership.
“Our entire focus remains on taking proactive steps to maximize long-term shareholder value, and our priority in this process involves identifying a seasoned industry professional to serve as Fiesta’s permanent CEO,” Smith said.
Danny Meisenheimer, chief operating officer of Pollo Tropical, will serve as interim CEO, succeeding Tim Taft, who will retire on Sept. 30. Meisenheimer has served as Pollo Tropical COO since 2013, and joined Fiesta as chief brand officer in 2012.
Fiesta’s board said it was already searching for a permanent successor to Taft, who announced his retirement in August.
Prior to joining Pollo Tropical, Meisenheimer served as COO and chief brand officer at Souper Salad Inc. from 2008 to 2012, and as vice president for brand management at Pizza Inn Inc., now Rave Restaurant Group Inc., from 2005 to 2008.
Todd Coerver, Taco Cabana chief operating officer, has resigned effective Oct. 20, the company said. The brand has named Mark Phillips as interim COO. Phillips worked with Taco Cabana for more than 20 years, and has served as vice president of operations since 2012.
Fiesta’s board also said it would suspend development of Pollo Tropical restaurants in Texas, which had been a growth market for the brand, and would review its strategy.
“The company will continue developing and opening Pollo Tropical restaurants across Florida and in Atlanta,” Fiesta said in a statement.
Between 14 and 17 new Pollo Tropical restaurants are scheduled to open in Florida in 2017, and eight to 10 new Taco Cabana restaurants are set for Texas, the company said.
For the second quarter ended July 3, Fiesta reported net income of $8.9 million, or 33 cents a share, falling from $11.2 million, or 42 cents a share, the previous year. Revenue increased 5.6 percent, to $181.5 million, from $171.9 million the previous year.
Pollo Tropical same-store sales fell 1.4 percent, and Taco Cabana same-store sales dropped 3.8 percent.
As of July 3, Fiesta had 172 company-owned Pollo Tropical restaurants, 164 company-owned Taco Cabana units, 37 franchised Pollo Tropical locations and seven franchised Taco Cabana restaurants.
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