At Pancheros, a burrito resurgence
Bob Thomson (center, with Director of Operations Craig Noah and GM Gabby) is the 93-year-old franchisee building Pancheros’ presence in the Twin Cities market of Minnesota.
“I’d be bored to death, I love working.” That’s Bob Thomson’s response when asked if he’s considering retirement anytime soon. In fact Thomson, who celebrated his 93rd birthday in March, is probably putting in more hours as he works to expand the presence of Mexican fast-casual franchise Pancheros in the Twin Cities market of Minnesota.
Already a successful multi-unit Subway operator with 20 locations throughout northern Iowa, Thomson purchased the Pancheros restaurants in the Minneapolis suburbs of Bloomington and Golden Valley in 2015 and has since opened three more, including two in a five-week span earlier this year. Plans call for a dozen more, and Thomson is excited about the energy surrounding a brand that over the past year has undergone a marketing strategy revamp and recently rolled out a new consumer-facing campaign highlighting its fresh-pressed tortillas, burritos and queso.
While Pancheros’ food stood out first to Thomson—“I never ran into anybody that doesn’t like it. The burritos are phenomenal.”—he also did “due diligence on the vitals” and said he was impressed with those numbers. The cost to open ranges from $404,325 to $931,000 and Pancheros reports an average unit volume of $1,128,463. “Our stores are all growing at a rate we’re very pleased with,” noted Craig Noah, Thomson’s director of operations.
The Coralville, Iowa-based franchise’s leadership was another draw; the brand is still led by Rodney Anderson, who founded Pancheros in 1992.
“They’re about as pure as Ivory soap,” said Thomson. “They’re there to support us, and if we have something to complain about, they’ll listen.”
After owning a travel agency and five Benjamin Franklin craft and retail stores in Iowa, Thomson bought his first Subway store in 1990 and at one point had 27 before “they started to cannibalize themselves.” Still, “Subway gave us a good start,” he says, “but I think diversity is good.”
‘Burritos better built’
Designed for social media, Pancheros’ new 15-second videos highlight what VP of Marketing and Franchise Development Ryan Murrin said are differentiators for the brand, namely its wielding of a plastic spatula named Bob the Tool, which employees use to mix ingredients in the tortilla before rolling the burrito. “You’re not getting just a big bite of sour cream,” Murrin said of the technique. Other spots showcase the fresh-pressed tortillas and Pancheros queso made with pepper jack cheese, and all play off the brand’s “Burritos better built” tagline as part of an integrated marketing strategy aimed at driving sales and expanding the system.
“Pancheros had this really great brand that a lot of people loved, but there’s so much opportunity to introduce the brand to more people,” said Murrin, who came on board in September 2018 after spending 15 years in advertising and marketing roles at Chipotle.
Integration of geo-targeted ads will also help the 70-unit chain maximize its marketing spend. “We’re a very local brand in a lot of places so we look at ways to make local media dollars go further,” said Murrin.
Murrin helped develop Chipotle’s loyalty program and brings that expertise to Pancheros, which is refreshing its own app with plans to tap into loyalty data and push different offers and rewards to its high value guests. The brand started testing delivery last summer with Olo’s Dispatch platform that uses a network of third-party delivery services to execute an order that still originates in Pancheros’ online system.
“Part of that was we wanted the data on who was ordering so we could talk to them and understand their behavior,” said Murrin as he noted third-party aggregators themselves aren’t always keen to share customer data. The test so far has been “really promising,” and “we’re seeing significant increases in overall sales compared to restaurants that are not doing delivery.”
As it seeks to attract new franchisees, Pancheros also debuted a revamped franchise website Murrin said makes the process “more transparent and even more responsive.”
Potential franchisees have access to more investment information, including start-up costs and financial performance representations. “We’ve unlocked all of that information on the new site,” said Murrin. “People want to do their research online before they get on the phone with someone.”
A multi-unit franchisee recently opened Pancheros’ first Texas location, in McKinney, north of Dallas, and has another under construction in Irving. Murrin said the brand will continue to target multi-unit owners as it looks to expand in areas that are “contiguous with other Pancheros,” such as in the Northeast around Philadelphia.