Forgive Don Ghareeb if he has a fondness for tacos. The tasty Mexican treat has been good for business.
Ghareeb is president of Birmingham-based Tacala, Taco Bell's largest franchisee operator with 138 restaurants in six Southeastern states. Tacala operates 28 Taco Bells in the Birmingham area and 39 statewide. Its restaurants employ 2,500 people and posted sales of $120 million last year.
Ghareeb, a Springfield, Mass. native who has spent 30 years in various management positions in the fast-food restaurant industry, never imagined his Tacala would achieve such far-ranging success 16 years ago when he and business partner Richard Reese began brainstorming about what to do with some real estate they owned in the metro area in 1989.
Ghareeb and Reese, at the time executives in the Jack's hamburger chain based in Birmingham, saw a market for tacos in the Magic City. Taco Bell, then operated as a part of the Pepsico soft drink conglomerate, didn't have much of a presence in Birmingham at the time.
Ghareeb and Reese soon began opening Taco Bells across Alabama, then expanded across the Southeast. Ghareeb said their success exceeded expectations.
He credits Reese, who has not worked for the company since developing a major health problem a year ago, for the vision of hooking up with Taco Bell.
Keys to success
"A key to our success has been the strong partnership I have had with Dick Reese over the past 15 years at Tacala and 15 years prior to that," Ghareeb said. "I also credit aligning with a top national chain and our team members in the field and at the restaurant support center who live customer mania day to day."
Taco Bell, the nation's largest Mexican-cuisine fast food chain with 6,500 restaurants nationally and 280 others worldwide, had $5.4 billion in 2003 sales at both company and franchise-owned stores, Ghareeb said. Much of its growth has come since Pepsico spun off its restaurant division that includes Pizza Hut, KFC, Long John Silvers and Taco Bell into a separate subsidiary, Yum Brands Inc.
"It allowed us to not get caught up in a big conglomerate and be more focused," Ghareeb said.
Bob Robicheaux, a marketing professor and retailing expert at UAB, said it is to Birmingham's credit to be home to such successful restaurant companies as Tacala, Jack's, Milo's, Hamburger Heaven, Sneaky Pete's, plus barbecue chains Golden Rule, Jim n Nick's, Full Moon and others.
"There is a rich history in Birmingham as a center for retail entrepreneurs that goes back to Bruno's, Pizitz, and Parisian," Robicheaux said. "The local restaurant guys have been able to feed off of their success."
In addition, many national chains such as McDonald's and Burger King (basketball legend Magic Johnson just bought five Burger Kings in the city) are expanding their presence in Birmingham.
One major reason so many chains have reaped success in Birmingham is the market's penchant for fast food, said Marjorie Perlman, Tacala's vice president of marketing. "Birmingham consumers spend 23 percent more dollars per capita in the quick service restaurant category than the average U.S. consumer," Perlman said. "A larger pool of money creates an opportunity for more concepts."
Filling a niche
Ghareeb said Taco Bell has filled a niche by offering products at a great price. "While we compete with burger chains for share of stomach, Taco Bell does not have to compete with their products," he said. "We have license to think outside the bun," he added, echoing the chain's advertising slogan.
In the mid 1990's, Tacala bought 55 restaurants in Connecticut, Massachusetts, New York and New Hampshire from Taco Bell Corp., but soon sold those stores to concentrate on its Southeastern base. Its current restaurants are located in Alabama, Georgia, Tennessee, Kentucky, Virginia, and North Carolina.
Tacala has since doubled its presence in Birmingham, which Ghareeb says is a prime market for Taco Bell. Tacala is breaking ground in April on a new restaurant in Chelsea and plans to replace an older building with a new one in Colonial Promenade Alabaster later this year.
Tacala plans to build between four and six new restaurants and upgrade between three and six existing Taco Bells in its markets this year.
"The restaurant business operates 24/7 which requires dedication," Ghareeb said. "It is unique in that one facility acts both as manufacturer and as a retail outlet, so it requires people with a variety of skills. You need to be open to diversity in styles. One size does not fit all."
Ghareeb said he has made sure that Tacala is active in the communities it serves. The company has raised more than $1 million to support teen programs at Boys & Girls Clubs and was named a "Champion of Youth" by Taco Bell Corp. in 2001.
"I believe in giving back," said Ghareeb, who serves on the board of the Taco Bell Foundation.
The Birmingham News, April 3, 2005
By Roy L. Williams, News staff writer