Controversial promo a 'clarifying moment' for Pizza Patrón

At first glance, the next limited-time offer for Dallas-based Pizza Patrón set to debut Monday, the “La Chingona” pizza, seems like a familiar strategy for the brand, but the chain’s leaders classify the promotion as something bigger, calling it a “clarifying moment” that sets the brand up for significant repositioning.

One year ago, Pizza Patrón halted the sale of new franchise agreements and culled its ranks of franchisees who had become “disengaged,” founder Antonio Swad said. The brand closed one-fifth of its locations over a period of several months, going from 103 units to 81. Following that mass closure, Pizza Patrón embarked upon a repositioning of the brand that aimed to serve more directly a core customer who is Mexican or Mexican-American rather than market more generally to the entire Latino or Hispanic demographic.

“This is the kind of thing that’s difficult to do when you’re focused on selling franchises,” said Swad, who founded Pizza Patrón in 1986 and returned to the role of president last year. “I didn’t want to do that anymore; I wanted to focus on customers, food and growing the business. I didn’t want to spend my time listening to my team being ground down to the nub trying to get people to go along with our strategy.”

Even the franchisees remaining in Pizza Patrón’s now-89-unit system do not completely agree with the next promotion, La Chingona, which will be a litmus test of sorts for the brand’s more Mexican-focused strategy. Some operators are opting out of the promotion, wary of a controversy that has sprung from what the brand’s marketers say is a misunderstanding over the word, a play on the Mexican slang word, “chingón.”

‘Speaking Mexican instead of Spanish’

Beginning March 31, Pizza Patrón will sell La Chingona, a large pizza topped with fresh jalapeño and a proprietary jalapeño-infused pepperoni. The spicy pizza is named after the exclamation it elicited among the members of the marketing team, said Edgar Padilla, the brand’s marketing manager and a native of Mexico, where the word chingón has a positive connotation.

“It came out of my mouth that way: ‘Esta es chingón,’” Padilla said. “In English, you would say something like, ‘Wow, this is badass,’ but in Spanish you would say it’s ‘chingón.’”

Then why the controversy? To Spanish speakers outside of Mexico, including natives of other Latin American countries and many acculturated Hispanics in the United States, the word has a more derogatory context, closely resembling the Spanish verb “chingar,” which translates to the swear word beginning with F in English.

But to Pizza Patrón’s core customer — a young male born in Mexico who lives in the United States, prefers to speak Spanish and is a blue-collar worker — La Chingona is a perfect fit, said Andrew Gamm, the chain’s brand director. “You would hear that term used all over the place in our stores,” Gamm said. “We knew it was a natural way to pick a word that would connect with that customer.”

The pizza’s name did not connect with several franchisees, who have opted not to sell it under the La Chingona name and will not be permitted to sell the pizza under a substitute moniker. Several prominent Spanish-language TV and radio broadcasters, including Univision, refused to air Pizza Patrón’s ad campaign as well.

The brand has managed through controversy before when news of its promotions stoked the debate over Mexican immigration and issues related to assimilation. It happened in 2007, for example, when Pizza Patrón accepted Mexican pesos as payment, and in 2012, when the chain offered free pizzas to guests who ordered in Spanish. Yet Gamm did not expect a similar situation with La Chingona.

“I understand now that if we touch on anything that builds a bridge to immigration, it has the potential to be controversial,” he said. “But this was just in the Spanish-language realm, so we weren’t anticipating this kind of pushback.”

The brand decided to have fun with the implication that it was “being censored for speaking Mexican,” Gamm said, changing the name of the pizza in marketing materials to “La Ch!#gona” and recording commercials with the name bleeped out.

News of the controversy has built anticipation among Pizza Patrón’s guests, who already have begun asking to buy La Chingona, Padilla said. He added that the decision to sell La Chingona reflects Pizza Patrón’s strategy to focus more intently on Mexican customers.

“Until you become an authentic Mexican brand for those people living in the U.S., you can’t build a brand for Mexicans,” he said. “It’s the first time we’re speaking directly to the heart of the core customer of Pizza Patrón. We’re speaking Mexican instead of Spanish.”

Reinvented and rebuilding

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The original launch date for La Chingona was pushed back as Pizza Patrón spent several months trying to get its franchisees, more than half of whom did not want to sell the pizza, on board, Gamm said. If those same franchisees have further reservations about Pizza Patrón’s new Mexican-centric positioning, the brand would be open to helping them leave the system, he said.

Swad added that franchisees who have already exited include single-unit operators, as well as some of Pizza Patrón’s multiunit franchisees, whose closures brought about the brand leaving markets, including Las Vegas and El Paso, Texas, entirely.

But going forward, he expressed confidence that the remaining franchisees have signed on to the new focus, which should allow for renewed franchise growth and, for the first time, the opening of company-owned units.

“My job is to get everybody on the planet they want to live on,” Swad said. “As much energy as it takes to lead a system, I wanted to spend it with people who appreciate the brand the most and could prosper with it.”

Though Swad does not plan to add to the 10 restaurants he owns personally, he said plans for 2014 include 10 units owned and operated by Pizza Patrón Inc., as well as 15 franchised locations. For the first time this year, the company will build a freestanding restaurant built to specifications from the ground up, he said, noting that the chain’s current freestanding units have all been converted from other restaurants.

After the chain drastically reduced its store count, average unit volumes in the remaining locations shot up, Swad said. The brand hit a record sales year of just less than $40 million, reflecting a high-single-digit increase in same-store sales for continuing locations.

For the first seven weeks of 2014, Pizza Patrón’s same-store sales rose 8.2 percent, Swad said, adding that he is aiming for a 10-percent systemwide increase for the year.

“We’re building corporate stores, accelerating growth with franchisees but also getting rid of the deadwood,” he said. “All within a couple months, we’re getting results. I’m in the right seat at the right time, and it’s time to mash the accelerator pedal down.”

He foresees the aggressive growth rate planned for 2014 continuing for several years, helped in large part by Pizza Patrón’s new positioning focused more intently on Mexicans than generally on Latinos.

“Everywhere we were before, there is a healthy Mexican-American population,” he said. “It’s about 60 million people strong, and when you’re declaring that as your base, you can build stores for a long, long time. There’s potential for 1,000 locations, and we’re only 10-percent there. Our focus gives us an ability to see where the top is, and I like where that spot is.”

Pizza Patrón has restaurants in Texas, California, Arizona, Colorado, Illinois and Georgia.

This story has been revised to reflect the following correction:

Correction: March 28, 2014  An earlier version of this article misstated the markets where Pizza Patrón exited last year following the closure of several franchised restaurants. The brand exited the Las Vegas and El Paso, Texas, markets.

Contact Mark Brandau at [email protected].
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