A Wall Street Transcript Interview with Timothy P. Taft, President and CEO of the Fiesta Restaurant Group, Inc. (FRGI)
67 WALL STREET, New York - March 17, 2014 - The Wall Street Transcript has just published its Restaurants Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Emerging Market Expansion - Store Sales Growth Trends - Cautious Consumer Spending - Restaurant Trends in China - Value for Consumers - Quick Casual Restaurant Growth
Companies include: Fiesta Restaurant Group, Inc. (FRGI)
In the following excerpt from the Restaurants Report, the CEO of the Fiesta Restaurant Group discusses the outlook for his company for investors:
TWST: Give us a little history of Fiesta Restaurant Group.
Mr. Taft: Prior to May 7, 2012, we were part of Carrols Restaurant Group, publicly traded under TAST in Syracuse, New York. They are the largest Burger King franchisee. We were intermingled with that brand for 10 or 11 years. The board of directors decided that the companies would be worth more separately than they were together, so we spun out of Carrols in 2012. Their thesis has proven correct given the stock movement.
Our two brands are Taco Cabana, which was 35 years old last year, and Pollo Tropical, which was 25 years old last year. We have these two mature brands, but when you roll them into a new corporate office, it feels like a startup. Sometimes people are confused about Taco Cabana. They go to Texas, and they say, "It's Mexican, right? Isn't that the same? How can that be differentiated?"
In Texas, which is the epicenter of Mexican food in the United States, when you drive down a street you will see not only hundreds of mom-and-pop Mexican restaurants on a street corner, but you also have Taco Bueno, Del Taco and Taco Diner, and all of their average unit volumes are between 700,000 and a million. Then you have Taco Cabana, and it has average unit volume of 1.8 million. The reason is because the food is differentiated. We cook 24 hours a day. Everything is cooked over an open flame. Like Pollo Tropical, you go up to the counter and you order your food, then you go sit down, and we bring the food to you.
TWST: Are you emphasizing one brand over the other, or are they fairly equal?
Mr. Taft: If you take a look at our development and where capital is going to be allocated, it is focused on Pollo Tropical. This past year, we opened 12 new Pollo Tropical restaurants, and this year we will open in excess of 22. We will open up 10 in Texas, and the rest of them will be in Florida, Georgia and Tennessee. Part of the reason for that is because we have been refining the Pollo Tropical brand longer than we have Taco Cabana's.
The first Taco Cabana outside of Texas will be opening up in Atlanta this April and will be called Cabana Grill. It is the first one of its kind in that time zone, in the Eastern time zone. We feel that we have proven Pollo outside of Florida, outside of the Southeast, and now it's time for us to prove the Taco concept outside of Texas. We will probably build four restaurants this year between Taco Cabana and Cabana Grill.
TWST: So overall, is your growth strategy different for each brand, or is it a coherent growth strategy for the company?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
