Over the past two years, Rusty Taco has undergone significant changes. Inspire Brands sold the chain in 2022 to Gala Capital Partners after owning it for about four years. Under Gala’s ownership, the chain brought its development in-house, according to Franchise Times, and hired a director of franchise development and sales in April.
Daniel Smith joined the chain as president in May, after a six-year stint at Hopdoddy Burger Bar as COO. Smith has significant restaurant experience. He spent his early career at Claim Jumper Restaurants, where he worked for 26 years. He also has worked at Ruby’s Diner and Sammy’s Woodfired Pizza, and is a former Pieology franchisee, per his LinkedIn profile.
Under Smith’s leadership, Rusty Taco, which has over 30 units, has been focusing on growth, particularly in Texas, Oklahoma, Arizona and Florida. The chain is planning corporate-owned store expansion, as well.
Restaurant Dive spoke with Smith about some of the biggest challenges Rusty Taco faces this year, how it’s approaching franchising and growth, and how Smith is setting up the company for long-term success.
Editor’s note: The following Q&A was conducted via email.
Restaurant Dive: What are the biggest challenges your company faces this year, and what are your strategies to overcome them?
Daniel Smith: Rusty Taco, like our industry peers, faces external challenges such as inflation, commodity pressures, and the uncertainty of an election year. However, our primary focus is on internal transformation.
We're revitalizing Rusty Taco while honoring our heritage. A top goal is to elevate the brand beyond “good” to truly exceptional. This involves:
- Repositioning our marketing to reshape brand perception
- Adopting a bolder brand voice and image
- Strengthening our partnership with franchisees, such as recognizing their valuable insights
- Rebuilding our corporate team with fresh talent aligned with our new vision
- Conducting a comprehensive review of our menu, ingredients, and flavors to ensure irresistible offerings
By addressing these internal factors, we're positioning Rusty Taco for sustainable growth and making our mark in a competitive market.
What lessons have you learned from previous positions that you bring to your current role?
Throughout my four-decade career, I've distilled a fundamental principle: “People drive process, and process drives results.” This simple, yet, powerful insight forms the cornerstone of my leadership philosophy.
The foundation of success lies in assembling an exceptional team. I'm drawn to achievement, and I've observed a clear pattern: Success breeds success, while failure perpetuates itself. My approach is to cultivate an environment of winners — individuals who not only understand success but expect it.
My focus isn't solely on the food industry; it's on the human element that powers it. I'm in the business of people first and foremost. Once a high-caliber team is in place, we collaboratively develop robust processes. These aren't set in stone — we remain agile, adapting our methods as circumstances evolve.
This dynamic interplay between stellar talent and refined processes is what consistently delivers outstanding results.
What excites you about your company’s trajectory for the next three years?
The opportunity with Rusty Taco’s model lies in its versatility and broad appeal. We offer flexibility in location choices, partnerships, and menu offerings, making Rusty Taco adaptable to various markets. Its appeal spans diverse demographics, providing high-quality, fresh tacos at competitive prices that attract a wide range of customers.
What sets Rusty Taco apart is its unique value proposition, offering guests control over their spending with the flexibility to adjust meal costs to budgets and preferences. We serve multiple dining occasions, including communal dining experiences, convenient food on-the-go, lunch and dinner options, and overall versatility for nearly any dining scenario.
Recent shifts in consumer behavior have only reinforced the strength of our model. We're confident that our fresh, high-quality tacos at a fair price point resonate with a wide audience, positioning us for continued growth and success in the evolving food service landscape.
What’s a trend that concerns you that people aren’t talking about?
Many competitors are engaging in deceptive pricing strategies, a concerning trend that hasn’t been discussed enough. These brands often use a bait-and-switch tactic, where discounted items are prominently featured to draw customers in. At the same time, they implement significant price hikes, sometimes in the double-digits, across the rest of their menu. This approach misleads consumers and raises concerns about fairness in pricing.
Another troubling trend is the degradation of product quality, especially among brands that were once committed to delivering high-quality offerings. These companies are gradually removing premium ingredients and attempting to hide these changes from customers. In doing so, they are compromising the original mission of product excellence that their brands were built on.
At Rusty Taco, we take a different approach. We are dedicated to maintaining transparency in our pricing across the entire menu, ensuring customers always know what they’re paying for. Our unwavering commitment to high-quality ingredients reflects our core values. We believe that maintaining the integrity of our products is essential not just for short-term success, but for building lasting customer relationships.
By staying true to these principles, we believe that Rusty Taco is well-positioned to authentically navigate market challenges and retain customer trust in the long run.
How have you been working with franchisees to drive growth?
At Rusty Taco, we’re focused on implementing a new expansion and partnership strategy to support our growth goals while ensuring new and existing franchisees are eager to grow with us:
- Corporate Growth:
- Actively scouting the Dallas Market for new corporate locations
- Near-term goal: Establish five to six corporate-owned restaurants
- Enhanced Franchisee Support: We're strengthening our franchise partnerships through
- Business Model Optimization:
- Intentional efforts to refine and improve our financial framework
- Increased Corporate Support:
- Restructured corporate team to provide more comprehensive assistance.
- Aim to actively support franchisees in day-to-day business operations
- Collaborative Approach:
- Implementing active listening strategies with franchisees.
- Recognizing and leveraging the talent within our franchise network.
- Committed to understanding franchisee perspectives and insights.
- Business Model Optimization:
This multi-faceted approach demonstrates our commitment to both corporate growth and franchisee satisfaction. By fostering a more collaborative and supportive environment, we're positioning Rusty Taco for sustainable expansion while ensuring our franchisees have the tools and support they need to thrive.
