Burritoville promotes 'fresh' philosophy in NY growth push

Nation's Restaurant News, Jan 4, 1999 by Milford Prewitt

NEW YORK -- Recognizing how lucrative restaurants can be when they serve fresh foods of high quality, a pair of exChevys unit managers are tapping their former employer's "Fresh-Mex" operating philosophy to help expand a chain concept emphasizing freshness.

At 7 years old, the 10-unit Burritoville is acquiring some prune real estate and focusing on high-volume pedestrian locations in Manhattan, such as the Financial District and Greenwich Village, to offer a higher-quality alternative in the city's steadily expanding quick-service Tex-Mex field.

Founded by David LaPointe, a former general manager of a Chevys unit in Alameda, Calif., and Bob Salamack, another Chevys alumnus, Burritoville has become recognized as one of New York City's leading, home-grown, quick-serve Tex-Mex concepts.

Its closest competitors are believed to be Fresco Tortilla, a loosely franchised, 12-unit concept, and the seven-unit California Burrito, whose president, Peter Daghlian, a former Blimpie franchisee and self-proclaimed "burrito master," recently was hired away by Burritoville as a full-time consultant.

With annual sales expected to top $7 million in 1998, Burritoville already has signed new leases on two new outlets for 1999 as it carves out a growing market among fast-food users who want a more flavorful and fresher product.

"Where these guys break the mold is what they are doing in the kitchen," Daghlian said "Where many Tex-Mex concepts have their suppliers prepare the filling for their burritos, freeze the mix and then rethermalize it in the unit, Burritoville is making it from scratch, and they are doing it quickly."

With most of the Burritoville customers' checks ranging between $7 and $7.50, - especially at the chain's Wall Street and Bleecker Street locations - they find the price point and the speed of service an added value for timepressed office workers, according to Daghlian.

"A few years ago all the talk was about home-meal replacement, and you saw chains like Eatzis and Boston Market rush in to feed the need," Daghlian explained "But in our market we don't view it as delayed consumption [However], we know people are buying our food in the day and not eating it until night.

"They can do that because of the quality of the products we're using and the fact that everything is made fresh. Even our tortillas are made daily on premises. The quality philosophy is something a lot of chains don't have the courage to commit to."

Not only are the tortillas made on site, but they form a kind of entertainment element for guests, as kitchen crews prepare, shape and bake them in Burritoville's open kitchens.

The company is running about 31-percent food costs, a percentage Daghlian expects will drop as Burritoville opens more stores "But we've got to get our paper costs in line," Daghlian conceded.

Despite the urban locales, Burritoville units resemble miniature cantinas on the Tex-Mex border. A heavy use of wood flooring and fixtures blends with a rustic Southwestern ambience. Adding to the decor package is the company's merchandising of various hot pepper sauces, which line the dining rooms, with brand names like "911" or "Ass Kicking Hot Sauce."

In addition to the corn tortillas, all of the salsas, from super hot to mild, are made on premises daily.

LaPointe, a native New Yorker, said that after PepsiCo bought Chevys, he lost his enthusiasm for the company, even after having been a general manager for five years at a unit that was among the chain's highest-performing branches. It was then, he said, that he began to think about moving back home and starting up a taqueria concept.

Though his spirit for Chevys waned, he did not forget what the San Franciscobased chain - which PepsiCo sold two years ago - taught him about food quality.

"I really learned the business from them," he said "Their key thing was to make everything fresh, every day. And if you do it right and make it better than everybody else, you don't have to worry about finding customers.

"That was Chevys' mentality, and that's what we're doing here. There's just no compromise on food quality."

Using savings and investment dollars from friends and colleagues, he opened the first Burritoville unit in 1992 and has used internal cash flow and some outside money to finance subsequent growth.

LaPointe conceded that at 31 percent, Burritoville's food costs could be considered high for a company of its size. But he said high food costs could be the price for gaining loyal customers.

"I know there are some companies that would not accept these kind of food costs," he said "But I'm shooting to drive the top line. If we build sales, the rest will take care of itself in time."

Daghlian said he was stunned initially by the company's food costs, especially the annual $70,000 in chips and home-made salsa the company gives away with each order. But the freebies do not worry LaPointe 'That $70,000 has probably brought us $2 million in new customers," he observed.

Burritoville's menu boasts a broad variety of burritos and side dishes. In addition to traditional beef and chicken offerings, Burritoville includes several weekly and daily specials as well as vegetarian and vegan items. Almost 20 percent of the menu has no meat ingredients.