Heather Neary was named chief executive officer of Taco John’s in March, bringing with her two decades of restaurant leadership experience. She wasn’t actively looking to move on from her role as president of KBP Brands, but the more she learned about Taco John’s, the more intrigued she became.
“The brand equity, the legacy at 55 years … there are still two families involved in the ownership of the company and I love what they stand for, their passion for the brand, their willingness to evolve – it just seemed like something I should look into more seriously,” Neary said during a recent interview at Prosper Forum, an event that brings foodservice leaders together to share ideas and build a diverse talent pipeline.
She is now charged with accelerating the Cheyenne, Wyo.-based brand’s expansion through the Midwest and beyond, with new locations planned in existing and new markets in the next few years. To execute this goal, Neary has spent the last six months on a listening tour of sorts, getting to know franchisees, understanding what brings customers in, and so forth. This foundational work has allowed her to derive priorities, including creating a stronger structure for the brand. She developed a “five Cs” framework – consistency, communication, collaboration, culture, and kindness.
“Humor me, I obviously know kindness does not begin with ‘c’, but those five key philosophies are helping us make decisions. You can try to tackle everything at once or you can find three to five things you can do to drive the brand forward,” Neary said.
Those “five Cs” are informing Taco John’s sharpened focus on marketing, development, culture, technology, and unit-level economics, the last of which Neary said is the most important.
“If franchisees feel like they can grow with the brand and make what they need to be successful, it works for all of us. So, we’re heavily focused on driving topline sales and finding ways to save money in the middle of the P&L,” Neary said.
If the end of 2023 is a jump off point for this growth, consider that Taco John’s finished the year with about $429 million in sales and 364 locations, according to Technomic data. Average unit volumes were about $1.17 million, or just slightly under the category average of $1.25 million. Its footprint is mostly in the Upper Midwest, so Neary is bullish about the white-space opportunity for the brand.
“We are taking apart the entire development process and rebuilding it to ask who are the best franchisees, where do we want to grow, what does our footprint look like? Bigger-box sites aren’t really needed anymore, so can we shrink our footprint and make it more efficient to drive higher gross sales and, ultimately, higher profitability?” she said. “The idea is for us to grow strong, smart restaurants with operators who are engaged and ready to grow with us.”
Beyond development, Neary is also leaning heavily into digital marketing and social media, as well as menu innovation. Her objective is to create a collaborative relationship between marketing and operations to create the right products and promotions to drive buzz and traffic. She has experience forging such relationships – during her time at Auntie Anne’s, she oversaw both marketing and operations.
On the operations side, Neary is establishing processes around cost of goods variances by volume band. Essentially that means training franchisees and their employees to ensure a product is made exactly to spec.
“If you make 15 tacos an hour and each one is a half ounce too heavy, that adds up. When you’re out of spec, your cost of goods gets higher,” she said.
Taco John’s is also developing new labor models to make sure the busiest times – lunch, dinner, late-night – are staffed appropriately. And, the chain is experimenting with technology to create labor models and has been testing artificial intelligence at the drive-thru at company-owned stores this year. Neary said the drive-thru AI test has so far been “phenomenal,” with a 94% non-interception rate. Taco John’s will extend the test to some franchisees in October.
“We are working through a lot of kinks on the company-store side and now pushing it out to a handful of franchisees and, assuming it continues to work strongly, we’ll roll it out to the system in 2025,” she said. “The goal is not to reduce labor, but to create more efficient labor; redeploy labor to improve speed of service. The more cars you put through the drive-thru, the happier your customers are because they’re not waiting, and the more profitable our franchisees are, and that’s the ultimate name of the game.”
Contact Alicia Kelso at [email protected]
