How Quick-Serve restaurants are scaling the food chain.

HOW QUICK-SERVE RESTAURANTS ARE SCALING THE FOOD CHAIN

By Jessica Wohl.

Lisa Mason stood outside a Chicago restaurant at 9:15 a.m. on a recent sunny Monday, where she would continue to wait for two hours. She wasn’t there for breakfast. She was there to get a $1 burrito.

Mason was the first person in line at the new Chicago outpost of Dos Toros, a New York-based fast-casual taqueria opening its second location in the Windy City. By the time the doors opened at 11:30 a.m., more than 200 people stood on the sidewalk in a line that stretched across the West Jackson Boulevard bridge over the Chicago River.

Prelaunch, Dos Toros did almost no marketing (think teaser signs in its windows pitching the new location, and promoting the $1 opening-day offer on social media), just some grassroots outreach. It included visiting employees in the office building where the restaurant is located, a soft opening days before the launch at which tenants got free burritos and tacos, and an email from the building concierge to tenants reminding them of the $1 deal.

“The term ‘influencer’ gets thrown around, but simply, somebody that works upstairs is a huge influencer for you, whether they have an Instagram or not,” says Marcus Byrd, marketing manager at Dos Toros.

Leo Kremer, who founded Dos Toros nine years ago with his brother, Oliver, says this approach to marketing works because the most-needed piece has already been placed: the location. The new Dos Toros is in an area filled with office buildings, and close to a commuter train station.

“It’s a cliché, ‘location, location, location,’ but it’s a cliché for a reason, and half that reason is literal awareness to the most actionable customers,” says Kremer.

Smaller restaurant chains such as the fast-casual taqueria are increasingly eager to take big bites out of the competitive restaurant industry, and it shows: While the number of new locations opened by the Top 100 restaurant chains (measured by U.S. system-wide sales) rose just 1 percent in 2017, according to Technomic’s 2018 “Top 500 Chain Restaurant Report,” the number for chains ranked 401 to 500 rose 3.9 percent. (Dos Toros is too small to make it into the Technomic report.) And they’re expanding mostly with localized, grassroots campaigns and strikingly limited traditional marketing.

When Chicagoland hot-dog chain Portillo’s was preparing to open its first Florida location in Tampa, the Chicago Blackhawks had just defeated the Tampa Bay Lightning to win the 2015 Stanley Cup. So the marketer put a full-page ad in the Tampa Bay Times that read, “Cheer up Tampa, there’s good news from Chicago today.” Peppered with a heavy dose of food puns, the ad announced that the fast-casual chain was on its way to the city. (A version congratulating Tampa Bay residents had also been prepped in case the local team won.)

The ad also directed people to the company’s website, giving Portillo’s a large group of informal brand ambassadors in a new market ahead of the restaurant’s 2016 opening. It has continued to gather emails via newspaper print ads, as well as social media, from potential customers in each new market, such as Minnesota and Wisconsin. In return, people can sign up for free meals days before the opening. Portillo’s also tells them to bring friends who haven’t had the food before, helping drive even more awareness by word-of-mouth marketing.

Those early events, like the ones at Dos Toros and other chains, also help the staff work out any last-minute kinks. And since Portillo’s food is free, no one really complains if the service takes longer than usual while employees train.

Portillo’s began with a single hot-dog stand in Villa Park, Illinois, back in 1963. Founder Dick Portillo soon named it Portillo’s and grew the chain in Illinois, including its first Chicago location in 1994. By 2000, his eponymous chain was also offering consumers countrywide a shop-and-ship option so they could re-create the menu at home (e.g., its Italian beef sandwich package includes beef, gravy, giardiniera, roasted sweet peppers and Italian rolls). Those shipments were critical to the company’s expansion plans outside Illinois, the company says, as Portillo’s could track its orders and know where its fans were. When it opened its first location outside its home state, in Buena Park, California, in 2005, it knew it had a good chance of succeeding there.