Del Taco is a chain of North American fast-food restaurants specializing in Mexican-style offerings, as well as American foods such as burgers, fries, and shakes. Del Taco is led by President Shirlene Lopez, and is headquartered in the city of Lake Forest, California. Their primary rival is Taco Bell.
History
1960s
Originally named Casa Del Taco (House of the Taco), the first Del Taco restaurant was founded in Yermo, California in 1961 by Ed Hackbarth. On the restaurant’s first official day of business, Del Taco made $169. By 1964, Hackbarth partnered with real estate broker David Jameson. Success of the first restaurant led to three in Barstow and a fourth restaurant in Corona (the first Del Taco with a drive-thru window). Dick Naugle, who installed the kitchen equipment in the Corona store, was impressed by the design and joined Hackbarth and Jameson in the fledgling business. In 1966, the trio founded Red-E-Food Systems, Inc. with the idea of franchising the Casa Del Taco brand. That same year, the original Del Taco sun logo was created and in 1967, Del Taco introduced their famous bean and cheese burrito with green or red sauce to their menu. Before long, the restaurants were being founded throughout Southern California.
1970s
By the 1970s, Del Taco became a franchise of change. Naugle left the company early in the decade to start his own Mexican fast food chain, Naugles. In 1973, the company dropped “Casa” from its name and Red-E-Food Systems became Del Taco, Inc. By that time, the company was enjoying a remarkable growth spurt; during one period, they were opening a new restaurant every month. However, in 1976, Hackbarth and Jameson sold Del Taco to a group of investors. The new owners sold the exclusive rights to use and develop the Del Taco name throughout the United States (excluding California; Eugene, Oregon; and Yuma, Arizona) to the W.R. Grace & Company. Grace, primarily a chemicals company, founded a new company, Del Taco Restaurants Inc. of Dallas, Texas, and a new subsidiary, DTG Inc., to oversee the various fast food chains it was acquiring. Nonetheless, the franchise continued to expand. In 1977, there were 50 Del Taco restaurants. A year later in 1978, there were 100. As Del Taco expanded, so did their menu. They included new items such as the Bun Taco, quesadillas, and ice cream sundaes.
1980s
In 1981, the New York Times reported that competition between Del Taco and Taco Bell was “very intense.” However, that rivalry was a mismatch, as Del Taco had roughly 350 restaurants (still located almost exclusively to California) in comparison to Taco Bell’s 1,400 plus restaurants throughout the U.S.A., at the time. Likewise, Taco Bell easily outstripped Del Taco in the perception of customers and the amount of money spent on ads (Taco Bell spent $22 million on television ads, whereas Del Taco spent $2.5 million, mainly on radio ads). In the meantime, though, Del Taco slowly expanded to roughly 200 restaurants by late 1987.
In February 1988, Del Taco’s 202 restaurants merged with the 171 Naugles’ Mexican fast food outlets owned by one-time Del Taco owner Dick Naugles. Anwar Soliman was the man behind the move and was, ironically, the mastermind behind the purchase of the rights to expand Del Taco throughout the United States back in 1977. In addition, the new Del Taco absorbed some of the Naugles menu, including the “Macho” items of current-day Del Taco. With the merger, Del Taco increased in size, and spread as far as St. Louis, Missouri. The 1980s also brought change in the operation, as Del Taco began to stay open all night long.
1990s
In 1990, Kevin K. Moriarty joined Del Taco as the new CEO, soon becoming the owner of the brand in conjunction with his management team. His team launched new efforts to grow the brand’s image while improving the total customer experience, setting the stage for extreme growth.
In 1992, Del Taco launched a $14 million program to redesign its restaurant exteriors, kitchens, and corporate logo. The company presented its Concept 2000 restaurant design and in August 1992 introduced its new logo. In place of the old orange and blue sunset, there was a yellow sun that rose over green mountains against a red background; these colors represented the primary ingredients of Del Taco food: cheese, lettuce, and tomatoes. Later that year, Del Taco executives announced far-reaching plans to expand the chain to 500 stores by 1995 and to add another 225 by 2000. The first new markets it set its sights on were Las Vegas, Nevada; St. Louis, Missouri; and the Northeast Corridor.
1993 featured Del Taco in a financial quagmire. They filed for protection under Chapter 11 in U.S. Bankruptcy Court, which puzzled many observers. In spite of the fact that renovations were made to keep Del Taco profitable, the company continued to pay rent on several unprofitable outlets that had already been closed. They also attempted to negotiate lease reductions on a number of other high cost sites. To make matters worse, Del Taco had been hit a $3 million lawsuit from a former supplier, which was later settled out of court.
In the five years from 1994 through 1998, Del Taco saw their company decrease and (eventually) increase in size. Though the company signed a deal to open 15 franchise stores in the Northeast with many more in the Southeast, the chain was nowhere near the goals publicized years earlier. In 1995, Del Taco (hurt by the closing of numerous unprofitable units) had only 300 stores, instead of growing to 500 stores. However, the chain began to prosper in 1997, when their total sales had reached an estimated $250 million. By December 1998, Del Taco boasted 325 stores in twelve states and President Kevin Moriarty predicted that the company would be debt-free by 2002.
2000s
In 2000, Del Taco had 372 stores located in ten states. That same year, the average Del Taco made $927,000 in sales, one of the tops in the fast food industry, and beat out giant rival Taco Bell by almost $10,000 per store. Also that year, an important deal was signed with the Compass Group PLC that enabled Del Taco stores to open on military bases. The first to do business was the store at Patuxent River Naval Air Station at Maryland in early 2001. Other Del Tacos were planned for bases in Puerto Rico, Naples, and Italy.
In 2001, Nation's Restaurant News reported that Del Taco had the largest average sales volume per store of any chain in the sandwich category, a remarkable achievement for a Mexican food chain, which traditionally ranked low in average sales.
In February 2002, a group of former Del Taco employees, all of whom were black, brought a discrimination suit against the chain. The group claimed that while working at Del Taco in the Los Angeles area, they had suffered verbal abuse, had been passed over for promotions in favor of Hispanic workers, and were being fired and replaced by illegal immigrants. The case had not been settled.
However, in an effort to raise its public profile in a positive light, Del Taco launched a sports-sponsorship program with teams in eight states, including the Mighty Ducks of Anaheim and Phoenix Coyotes hockey teams, basketball’s Los Angeles Clippers and Utah Jazz, the University of Nevada at Las Vegas’s football and basketball teams, and several minor league hockey and baseball teams. The deal placed the Del Taco logo on signs, drink cups, and special promotional items at the stadiums of the partner teams. It paid off as, in 2003, Del Taco announced that their restaurants topped $1 million per store in average annual sales, which was more remarkable considering that other stores, notably McDonald’s and Carl’s Jr., featured a decrease in annual sales.
In 2006, a private Nashville, Tennessee based holding named Sagittarius Brands, LLC, which is also the parent company of Captain D’s Seafood, purchased Del Taco.
In January 2008, Del Taco announced the opening of its 500th restaurant in Burbank, California. In April of that year, Del Taco unveiled their new Del Inferno hot sauce, made with Poblano chili peppers.
Demographics
The chain is concentrated in 17 states in the U.S.A.. Though nearly half of the states that contain a Del Taco are east of Texas (Illinois, Indiana, Michigan, Missouri, Ohio, Tennessee, and Wisconsin), the vast majority of the restaurants are located on the West Coast (Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, and Washington) with Las Vegas, Nevada having the most Del Tacos of any one city and California having the most Del Tacos of any one state by far.
Products
Unlike most fast food restaurants, Del Taco specializes in serving two different types of food: Mexican and American. Their standard menu includes tacos, burritos, quesadillas, nachos, crinkle cut fries, Double Del Cheeseburgers, shakes, and breakfast burritos.
Marketing
The first mascot of Del Taco was a character of the same name used from 1999 through 2000. While popular, Del Taco (the company) was hit by a lawsuit from Zorro Productions, Inc. and Tristar Pictures, Inc., who claimed that the "Del Taco" character – masked and costumed in black – infringed on their rights to the trademark Zorro figure. Del Taco settled the suit in January 2000, agreeing to make changes to the Del Taco character
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