Moe's Southwest Grill: fast-casual Tex-Mex chain offers guests a big welcome and lots of fresh, healthful fare.

(Special report: Tyson presents Nation's Restaurant News' hot concepts!)

In the ever-expanding quick-casual segment, Moe's Southwest Grill fast is becoming known as one hot tamale.

With an emphasis on service and food, the Tex-Mex chain, developed in 2000 by Atlanta-based parent Raving Brands Inc., in just four years has grown into a thriving 130-unit company that, in the words of its founder, chief executive Martin Sprock, ultimately seeks "world domination."

The concept, which franchises all of its stores--the Atlanta flagship is the only company-owned unit-already has captured the attention of consumers in the Southeast and now is positioning itself to take on markets in the Midwest and Mid-Atlantic states. The chain currently has contracts to franchise approximately 700 more stores within the next year, officials say.

Sprock was inspired to create Moe's after eating at several Tex-Mex stores in the Southwest. Those experiences made him think he could do it better with more healthful food.

"I had been eating burritos in different places in the Southwest and thought [a similar concept] would be a good idea," he says. "I'd been working with healthy kinds of food items and wanted to ride that trend. I saw a bunch of Tex-Mex places spring up and thought that was a great idea, the way to go."

So Sprock, who had worked with smoothie and healthful-food concepts before conceiving of Moe's, began nurturing his latest idea on big dreams and a shoestring budget. Targeting a market composed of parents with young children, the concept soon found its niche, attracting both the kids and their elders with a combination of flavorful rood served in a modern setting featuring warm colors, popular music, and an exciting and friendly atmosphere.

"The Moe's experience, besides the food being great, is centered on the welcome that customers get," says chief operating officer Rick Akam. "Employees give them a hearty welcome that's not cheesy or canned. They say, 'Welcome to Moe's' and the guests say, 'Glad to be here.' They want to have fun."

Another big draw for Moe's customers appears to be the variety of fresh, lower-fat menu items that are prepared to order.

"Everything is prepared fresh, and we also have a lot of vegetarian items," says Raving Brands executive vice president Daryl Dollinger. "It's a very large menu. We also sell beer, wine and margaritas. We market to both parents and kids."

According to executive chef Seth Salzman, Moe's strength lies in its extensive list of offerings. The chain's most popular items, he says, are its burritos and tacos.

"In addition to four different burritos, which can turn into other diverse things when you put steak, chicken or tofu in them, there are endless combinations you can come up with," he adds. "The only things fried are the chips. We don't cook with any lard or animal fats. We use really lean meats and no butter in anything, so the food is prepared in a real healthy style. You don't need to add fat if you're adding flavor. You just have to use the right spices."

Offers Sprock: "Most foods have at least a little bit of fat, but Moe's is much healthier than the usual Mexican restaurant. Our meats are grilled, and the beans are made with a veggie stock instead of oil or butter or lard."

In addition to the more healthful fare and an $8 average check, the chain's executives say, Moe's offers guests the opportunity to participate in a complete dining experience--to sit, relax and listen to the music of such popular artists as Jerry Garcia, the Beatles and Frank Sinatra.

"Our concept is multidimensional," says Akam, who left his post as president of Hooters of America two and a half years ago to join the team at Moe's. "To focus solely on the food would be a mistake. We offer the whole package, not just food. And it's that entire package that separates us from the rest of the pack. Still, when customers do try the food, they end up becoming loyal customers."

Salzman says the loyalty that the brand has developed is a direct result of serving good food at reasonable prices.

"We create loyalty in quite a few ways, but especially by serving great, healthy, quality items," he says. "Plus, we give great value. For what our customers pay, they really get a lot."

Furthermore, he states that first-time customers who are expecting a fast-food type of meal quickly are disabused of that notion.

"We really go out of our way to exceed expectations," he says. "People mostly look at us as a fast-food concept, but because there are so many concepts out there, they don't expect very much. We go out there and show our customers just how much we care about them."

With average unit volumes of approximately $900,000 and annual sales of about $125 million, Sprock and his team of executives think they have it right-right down to the franchising of future units.

"From a business prospective, we've been told by franchisees that they identify with our brand better because they believe it has more strength and legs than the others," says Raving Brands' vice president of finance, Matt Andrew. "It's something they can hang their hats on for the next 20 years."

But competition in the fast-casual Tex-Mex segment is tough, especially since three rivals pack the muscle of major burger chains. Segment leader Denver-based Chipotle is owned by McDonald's Corp. and has more than 320 stores. And Thousand Oaks, Calif.-based Baja Fresh, which is owned by Wendy's International, boasts 294 units. Wheat Ridge, Colo.-based Qdoba has about 130 restaurants and is owned by Jack in the Box.

Moe's officials, however, are undaunted.

"Basically, we're a franchisor," Andrew says. "We built the blue print from the ground up, but we support our franchisees 100 percent. Our conservative plan is to open 150 stores this year, and our goal by the end of 2004 is to be the third-largest Fresh Mex concept, behind Chipotle and Baja Fresh. Our long-term goal is to be No. 1 by 2006. We also expect to surpass both of them this year in systemwide sales."

Andrew reports that the chain's same-store sales, which he says are a key indicator of growth, ran 24 percent higher on average last year than they did the year before. Sprock attributes the sales spike to the larger demographics of some Northeastern and Western states where Moe's recently started trading.

"We've been up between 22 percent and 24 percent over the last three years," Sprock says. "'We're going into bigger demographics in the Northeast, and we just opened in California and Colorado. We're seeing bigger sales just because of the demographics."

In addition to teaming up with smaller franchisees, Moe's has contracts with such bigger players as Boddie-Noell Enterprises Inc. in Rocky Mount, N.C., and four or five of the founders of Hooters of America, who signed on to operate several stores in the Chicago market. Sprock says the company is selective about whom it sells stores to.

"Prospective franchisees have to show who is going to run their stores," he notes. "We've had a million doctors and lawyers [approach us]. You may be a great operator, but if you don't buy into or live and breathe your store, we're not going to sell to you. I bet half of our store system is made up of folks who operate one to three stores, but the other hall is about 50 [stores]. My feeling is if you don't believe in doing small deals, you shouldn't be in the franchise business."

To ensure that quality is maintained by all franchisees systemwide, Sprock says he is a hands-on chief executive.

"It's going on four years now, and I've never had to close a store," he declares. "There have been stores we've been unhappy with, and we fixed what we thought was wrong. It costs around $275,000 to $300,000 to build a Moe's store. If you're building something for $300,000 and you think it's not better than its competitors, then why bother building it in the first place?

"We may get stuck in a situation, but we're confident we would get out of it," he adds. "About six or eight months ago, we got uncomfortable with a franchisee in Lexington, Ky., and so we decided to take the store over. But at the last minute we found someone we trusted [to operate it]. The store has been open about two months and is going gangbusters."

To aid the brand in its quest to maintain quality control, Salzman has come up with a number of ideas, such as prepackaged spices, that help staff members during the food prep period.

"It's definitely a challenge to maintain quality, because all of our stores are franchised, but we hold [our franchisees] accountable to our standards," he says. "We want to protect the brand, and we also want to protect them as well, so we make sure that all of our [operators] are doing it right."

Salzman adds that putting simpler items on the menu also has shown itself to be successful.

"We purposely created menu items that are easily prepared," he notes. "The fewer moving parts you have, the better. Now, instead of measuring out 12 different ingredients, we have prepared spice packs for our kitchens. It makes things a whole lot easier and much more manageable."

As Moe's continues to grow domestically, Sprock says there are no plans for any public offerings or to expand the concept overseas.

"We're gonna build as many great locations with as many great partners as we can," Sprock says. "We're long-term thinkers. We're going to win our franchisees' respect. We want people who want the American dream--people who want to own their own businesses."

How'd It Go?
Moe Gotta Know:

Send Fan Mail To:

Media Inquiries Only: