Dual Brands: Hottest Dish at Fast-Food Restaurants

What do you get when you cross a Fuddruckers gourmet burger restaurant with a La Salsa Fresh Mexican Grill?

Increased sales and profit, according to owners of several chains that have taken the plunge and opened dual-brand restaurants. Los Angeles-based La Salsa will test the concept starting in April when it opens free-standing taquerias inside 20 Fuddruckers restaurants, including locations in Pasadena, Lakewood, Chula Vista and La Mesa.

La Salsa isn’t the only chain looking for a partner. Throughout Southern California, restaurants that once viewed each other as competitors are pairing up in search of lower costs and improved profit.

Anaheim-based Carl’s Jr. has joint ventures with Green Burrito and Long John Silver, Arby’s is adding P.T. Noodles’ pasta dishes and T.J. Cinnamons baked goods, while Orange-based Del Taco Inc. is opening restaurants with Mrs. Winner’s Chicken & Biscuits.

At a recent food service industry meeting in Atlanta, “the whole place was broken up into meetings and groups . . . who were looking at dual branding,” said Rory J. Murphy, vice president of operations for the Carl’s Jr. chain.

The trend toward dual-brand eateries prompted Nation’s Restaurant News to note that “the smart money already is looking down the road to the tri-branding of concepts . . . and if three concepts are possible under one roof, why not four or five?”

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That’s not a pie-in-the-sky view. Carl’s Jr. executives recently heard from a developer who wants to cluster as many as four eateries--say, pizza, burgers, Mexican food and yogurt--along with a gas station and convenience store. And on Thursday, a Texaco franchisee in Anaheim opened a gas station and convenience store at the corner of La Palma Avenue and Kraemer Boulevard that incorporates Subway and Taco Bell takeout restaurants.

Former competitors are joining forces to combat what Brea-based restaurant industry analyst Robert Sandelman calls “the veto vote.” That’s when Mom or Dad miss out on Mexican fare because the kids are dead set on burgers and fries.

Operators say there are plenty of potential barriers to successful unions. La Salsa President and Chief Executive Chuck Boppell likens a dual-brand restaurant to walking down the aisle: “Just like getting married, these things can be easy to get into but difficult, painful and expensive to get out of.”

A chain’s image can be sullied if its partner falls from public favor. Kitchens can become cluttered with competing cooking technologies. And, Sandelman cautions, “there’s always the problem of robbing Peter to pay Paul” if one menu steals customers from the other.

Operators maintain that restaurants and the public can both benefit from well-structured deals. Consider the 1995 deal that calls for Carl’s Jr. to augment the menu at 200 of its restaurants with Mexican-style fast food from Newport Beach-based Green Burrito.

By piggybacking with Carl’s Jr., Green Burrito is rapidly expanding its Southern California presence without the massive expense of building its own locations. Carl’s Jr., which does well at lunch with its burger-heavy menu, is getting a much-needed boost at dinner time from Green Burrito’s fare.

Sales at Carl’s Jr. locations that offer both menus have increased an average of 25% over the preceding year’s sales. But Murphy said that initial fears of Carl’s Jr. sales being cannibalized by the Green Burrito menu haven’t materialized.

Boppell said the dual-use stores can cut some expenses by combining some distribution and purchasing costs. “Fuddruckers probably buys a million pounds of beef a week and we might not buy a million pounds in a year,” he said.

Boppell sees another benefit: La Salsa’s affiliation with the 180-unit Fuddruckers chain should help La Salsa expand its taqueria--modeled after Mexico City restaurants--particularly in Eastern and Midwestern states.

Dual-brand restaurants mark a noticeable change in how operators view each other. Just a few years back, only a handful of operators understood the synergies that joint ventures can create.

The “days of viewing every restaurant out there as a competitor are gone,” said Lou Franson, vice president of marketing for Irvine-based El Pollo Loco, which now offers Foster’s Freeze desserts at 75 of its restaurants. “It’s now a matter of finding complementary brands, so you can maximize the sales out of the same four walls.”

Carl’s Jr. founder Carl N. Karcher, who built his fast-food empire upon burgers, fries and soft drinks, was one visionary who realized early on that some restaurants complement each other.

In 1994, Karcher began lobbying fellow board members to use Green Burrito’s fare to help stem a chainwide revenue slide. The issue sparked an acrimonious boardroom food fight that ultimately led to Karcher’s ouster as chairman.

The fast-food legend subsequently returned as chairman emeritus after a new investor group took control of the fast-food chain and sided with Karcher on the Green Burrito plan. CKE Restaurant executives now credit Karcher’s novel plan to blend burgers and burritos with helping to push the company’s stock to above $16 from below $10.

Karcher’s first brush with Mexican-style fare wasn’t as lucrative, however. During the late 1970s, Karcher opened--and quickly shut down--a small Mexican restaurant chain called Taco de Carlos, which was next door to Carl’s Jr. locations. Karcher later described the ill-fated venture as a “valiant effort that just didn’t pan out.”

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Combination Plates

Restaurants and fast-food establishments are joining forces to balance menu selections. In Orange County, 15 Carl’s Jr. locations offer Green Burrito items; El Pollo Loco serves Foster’s Freeze ice cream at 15 of its establishments. A similar plan is in the works for Taco Bell and Kentucky Fried Chicken. Where you can find dual menu eateries around Orange County:

Anaheim

Green Burrito/Carl’s Jr.

3110 E. La Palma Ave.

1200 N. Harbor Blvd.

El Pollo Loco/Foster’s Freeze

110 W. Ball Road

Anaheim Hills

El Pollo Loco/Foster’s Freeze

8245 E. Santa Ana Canyon Road

Brea

El Pollo Loco/Foster’s Freeze

2500 E. Imperial Highway

Buena Park

Green Burrito/Carl’s Jr.

6991 Knott Ave.

Costa Mesa

El Pollo Loco/Foster’s Freeze

1941 Harbor Blvd.

Dana Point

Green Burrito/Carl’s Jr.

34312 Pacific Coast Highway

Fullerton

Green Burrito/Carl’s Jr.

3240 Yorba Linda Blvd.

Garden Grove

Green Burrito/Carl’s Jr.

13011 Harbor Blvd.

11051 Euclid St.

6022 Chapman Ave.

El Pollo Loco/Foster’s Freeze

12909 Harbor Blvd.

12121 Brookhurst St.

Huntington Beach

Green Burrito/Carl’s Jr.

21532 S. Brookhurst St.

El Pollo Loco/Foster’s Freeze

16920 Golden West St.

Irvine

El Pollo Loco/Foster’s Freeze

88 Corporate Park

Lake Forest

Green Burrito/Carl’s Jr.

20532 Lake Forest Drive

Mission Viejo

Green Burrito/Carl’s Jr.

27092 La Paz Road

Orange

El Pollo Loco/Foster’s Freeze

18571 E. Chapman Ave.

1611 Katella Ave.

Green Burrito/Carl’s Jr.

3510 E. Chapman Ave.

San Clemente

Green Burrito/Carl’s Jr.

3929 S. El Camino Real

Santa Ana

El Pollo Loco/Foster’s Freeze

1702 E. 17th St.

101 S. Harbor Blvd.

2501 S. Bristol St.

Green Burrito/Carl’s Jr.

2511 S. Bristol St.

Tustin

Green Burrito/Carl’s Jr.

14041 Newport Ave.

El Pollo Loco/Foster’s Freeze

3002 El Camino Real

Yorba Linda

El Pollo Loco/Foster’s Freeze

18402 Yorba Linda Blvd.

Source: GB Foods, El Pollo Loco; Researched by JANICE L. JONES / Los Angeles Times