October 2008
by Christy Simo
Taco Mac is in a growth spurt. The 29-year-old restaurant concept currently has 22 locations, and its parent company, Tappan Street Restaurant Group, has its eye on south Georgia and the Southeast for future growth. Still, it’s taken a lot of trial and error to be the success that it is today. If you are considering opening up a second location or expanding into a new region, take note of Taco Mac’s lessons learned to help you success.
STARTING SMALL
In 1979, three friends from New York stumbled upon the original Taco Mac in Atlanta’s Virginia Highlands neighborhood and decided to bring their northern delicacy, Buffalo-style chicken wings, to the South. But they had a choice – either upgrade the kitchen or change the sign. The kitchen was more important, so the name stuck.
For years, the owners licensed out the name Taco Mac, but did little else to keep each location consistent. Every restaurant had different menus, price points and beer selections. So, Joe Ardagna, Bob Campbell and Greg Wakeham established Alpharetta-based Tappan Street Restaurants seven years ago.
“Tappan Street was formed to get some organization to the group, to expand Taco Mac and to get the existing stores operating the same,” says Bob Campbell, President.
“When Tappan Street was created, we made a very concerted effort to create consistency so that when you walked into any Taco Mac, you got a very similar experience,” adds Susan Oddo, Vice President of Operations. Still, the group is conscious of maintaining a balance between uniformity and the concept’s original character – a balance that is often lost when a restaurant expands too quickly. “While every restaurant group is trying to create consistency, we want to have consistency without losing personality,” Oddo notes. “We’re very mindful that we don’t sacrifice the quality and what got us here, and what people loved about Taco Mac.”
WHAT THEY’VE LEARNED
To maintain this balance, the group discovered the importance of site selection, lease issues and working with suppliers. It’s true that it’s all about location. But it’s also about research – a lot of research.
Tappan Street knows the demographics needed to support its restaurants and who frequents their restaurants. They look for specific statistics such as density of households and average household income. They also keep their ears to the ground on what’s happening, what’s new and who’s developing what. “We’ve built a pretty good relationship with a lot of developers and real estate guys who keep us in the loop,” Campbell says. “We try to stay ahead of the curve as far as what’s a growing, viable area.”
Street visibility is the most important feature they look for when choosing a site. “We feel that street visibility is our advertisement,” Campbell says. “We’ll spend more money to be on the street and visible with good signage than we would for a space that’s tucked back into a hole somewhere.”
Don’t shy away from a space that is surrounded by other restaurants, thinking that they will take business away from your own. It’s just the opposite, in fact. “We like to be around a lot of restaurants, as long as they’re not a direct competitor,” Campbell says. “More restaurants huddled together generally draw more people.”
Once you’ve found your ideal location, turn your eye toward the lease. Hire an attorney that specializes in commercial real estate to review the lease before signing on the dotted line. “I see a lot of people that don’t use attorneys, and that’s a huge mistake,” Campbell says. “They look at a lease, it sounds simple enough and they sign it. Everybody gets excited about what they’re doing, and next thing they know, they find something that completely hems them in as to how they can operate.”
What’s on paper is not set in stone until you sign, so don’t be afraid to negotiate. “When you’re trying to negotiate the business points, ask for the moon,” Campbell says. “Never be afraid to negotiate.”
And if the numbers don’t work, it’s better to walk away than sign a bad lease. “Don’t make that mistake and get caught up in the emotional hype of signing a bad lease,” Campbell says. “We always take the approach of if we don’t sign this lease, it’s not the end of the world, because there will be another location.”
“The relationship you enter into with the landlord really sets the tone for your relationship with the community in general,” Oddo adds. “We try to partner with those who have the same philosophies and business practices that we do.”
That includes suppliers, both of the food and the equipment for your new location, as well as the contractors to build out your new space. While you can have different suppliers for each location, Taco Mac prefers to work with the same suppliers whenever possible to build a knowledgeable relationship. “U.S. Food is our main food purveyor. We also use the same produce and bread suppliers for all of our stores,” Oddo says, adding that alcohol distributors change depending on the location.
Campbell finds it’s easier to maintain a good relationship with existing suppliers than seek out new ones for each location. “They know us, they understand us and they know what to expect,” Campbell says. “It just makes things much easier when you don’t have to retrain people as to what you want. Because if you’re opening a restaurant, you have a million other things to think about.”
Tappan Street has discovered differences between municipalities when opening in various counties and cities. “Hours of operation are probably the biggest difference,” Oddo says. “When and how late we can serve alcohol is exclusively determined by the local ordinance. We stay open with a full menu as late as the local ordinance will allow, which can be anywhere from midnight to 3 a.m.”
Permitting can also vary between cities and counties. “There’s some universal and state codes out there, but everyone interprets them a little differently,” Campbell says.
CHALLENGES
Expanding over the past 29 years hasn’t always been easy. Once the company knew they wanted to grow, however, they took a moment to assess the big picture. “We decided we’ve got to get these existing stores running top notch before we do an expansion,” Campbell recalls. “Then we needed to decide which direction we wanted to go.”
The group realized once they had more than five locations that they needed to consolidate operations into one central office. “One of our biggest challenges is to grow at the same rate internally as our stores,” Oddo adds. “We need to stay ahead of the curve as far as the number of employees we need to run the infrastructure, but you don’t want the infrastructure to grow faster than your expansion.”
LOOKING FORWARD
Taco Mac continues to open locations around the metro Atlanta area, and is considering opening restaurants in Macon, Savannah and throughout the Southeast. Another area of growth for Tappan Street is their newest concept, Deckard’s. Their first location will open in early 2009 in the Brookhaven area of Atlanta. Deckard’s will be slightly different than Taco Mac with a more upscale setting, smaller, chef-inspired menu and a more eclectic selection of beer, wine and liquor.
“Our new restaurants provide us an opportunity to introduce ourselves to a lot of people who don’t know what Taco Mac is,” Campbell says. Their Phillips Arena location could help them reach that goal. The two-story 10,000-square-foot restaurant opened this past May and is just steps away from the Georgia World Congress Center, CNN, Centennial Olympic Park and the Georgia Aquarium.
“We really do become the local watering hole,” Oddo adds. “We become the local place to take your kids, to go after the game or to go on a date. We cater to just about everybody’s needs.” â–
 Expansion Tips
1.       Research the area. Know the demographics of your site before signing on the dotted line. Know who comes to your restaurant and know how many people you need living in the surrounding area to support your new venture.
2.       Hire a lawyer. Have a commercial real estate lawyer specializing in leases to look over your lease before signing.
3.       Keep your ear to the ground. Get to know the landlords and developers in your area so you can learn about new developments and the hot areas of town.
4.       Stay close to home. Setting up a restaurant is no easy feat, and you’ll be going back and forth a lot in the weeks leading up to your opening and afterwards as your restaurant comes up to speed. Don’t make it more difficult by adding time-consuming travel to the mix.
5.       Get buy-in from the neighbors. Go to neighborhood or community meetings and take local opinions to heart. These people will be the ones who will frequent the restaurant – or not – once it opens.
6.      Plan ahead. Take time to look at your bigger expansion picture. How many locations do you want to eventually open? Where are you are considering down the road? How will you support new employees and infrastructure required to run multiple restaurants? Know the answers to these questions and you’re one step closer to success.
