Why Buffalo Wild Wings Just Rebranded Rusty Taco
When Buffalo Wild Wings announced just over a year ago it had purchased a majority stake in Rusty Taco, one thing was clear: The fast-casual street taco chain had national appeal.
Only a few months earlier, Buffalo Wild Wings CEO Sally Smith had suggested that B-Dubs' team was exploring "investment candidates to build a portfolio of diversified brands for long-term sustained growth." And of the more than 200 candidates Buffalo Wild Wings considered, Rusty Taco made the cut.
But to fully realize that potential, Buffalo Wild Wings is making a one strategic tweak. Specifically, in a press release last week, Rusty Taco announced that it's changing its name to R Taco.
"As we grow the business and expand beyond its Dallas roots," explained R Taco CEO Steve Dunn, "we wanted to ensure the concept name had broader appeal while still linking to the brand's heritage. Shortening the name to 'R Taco' still provides a link to co-founder Rusty Fenton's legacy while the phonetic play on 'R' sounding like 'our' is friendly and welcoming, like the spirit of the brand."
Credit: Buffalo Wild Wings/R Taco.
For what it's worth, not everyone's a fan. A "loyal patron" since the first Minneapolis Rusty Taco opened a few years ago near his home, Franchise Times contributor Tom Kaiser called Dunn's statement a "strange justification for a name change that, at first blush, feels quite generic." He also comically observed "I've found [Rusty Taco] an amusing name that many young (read: less mature) people might associate with some Urban Dictionary-worthy terms I'm unwilling to discuss in a professional forum. [...] And there's no innuendo with the letter R."
That's fair enough. But I also think it's exactly the point. Sure, there's risk in losing the relative novelty of the more unique "Rusty Taco" name. For first-time diners encountering the brand without a familiarity of that name, however, I'm not convinced that risk is significant enough to threaten either word of mouth or the chain's viability on a national scale -- especially if R Taco's wares are as delicious as everyone claims.
For anyone worried that B-Dubs is unnecessarily tampering with a proven concept, keep in mind the R Taco name is the only change planned for the company. R Taco's menu and operations will remain the same -- that is, with the exception of Buffalo Wild Wings lending its expertise to the national expansion.
The relationship with Buffalo Wild Wings has "far exceeded my expectations," Dunn told Franchise Times in April. "It's like we went from high school ball to the Super Bowl." Thanks to Buffalo Wild Wings' experience and scale, Dunn elaborated, R Taco now enjoys the benefits of superior customer analytics and "sophisticated site selection."
Speaking of new sites, I'm sure I'm not the only investor relieved B-Dubs is finally getting the ball rolling. As of last week's press release, R Taco still had the same nine locations (plus a single food truck) it claimed when the initial investment was made, as well as "plans in the works to open additional locations." Regarding those plans, Smith underwhelmingly revealed during Buffalo Wild Wings' most recent conference call that R Taco "should open one location in Dallas in the second half of the year."
To be fair, Buffalo Wild Wings has had its hands full over the past year, notably with its recent $160 million purchase of 41 B-Dubs franchise locations across Texas, New Mexico, and Hawaii -- a move that quickly increased the size of its company-owned restaurant base by almost 8%. Meanwhile, Buffalo Wild Wings not only continued to build new locations of its namesake concept stateside, but is also executing the launch of B-Dubs in emerging markets, including the first location in Dubai earlier this month, and the first in Saudi Arabia by the end of September.
Going forward, however, perhaps the new R Taco name will mark the beginning of an accelerated expansion for the brand, which means inching ever closer to the company's stated long-term goal of building a portfolio of around 3,000 restaurants globally. That's nearly triple its base of 1,110 locations at the end of last quarter, and why I'm perfectly content holding my shares as complementary brands like R Taco help Buffalo Wild Wings' growth story unfold.
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The article Why Buffalo Wild Wings Just Rebranded Rusty Taco originally appeared on Fool.com.
Steve Symington owns shares of Buffalo Wild Wings. The Motley Fool owns and recommends Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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