Franchisors of the future: Margaritas Mexican Restaurants | Global Franchise
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Tuesday 21st March, 2023

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Franchisors of the future: Margaritas Mexican Restaurants


Franchisors of the future: Margaritas Mexican Restaurants

Inspired by the welcoming villages of central Mexico, Margaritas Mexican Restaurants is cooking up a storm with its authentic concept and traditions

With an atmosphere rich with the flavors of Mexico, Margaritas Mexican Restaurants is walking the extra mile for its customers. Founded in 1986 by John Pelletier, the brand offers the chance to authentically experience the food, culture and hospitality of Mexico, without having to get on a plane.

With 25 locations throughout Massachusetts, Maine, New Hampshire, Connecticut, New Jersey and Pennsylvania, the brand’s success is driven by John’s strong connection to Mexico.

In the early 80s, while working at a Mexican restaurant, John had several opportunities to travel and fall in love with the local culture. He always wanted to build his own restaurant but the trips to Mexico inspired him to finally take the leap. “I didn’t feel like many Mexican restaurant concepts around me at the time were authentic to the experiences I had in Mexico. I wanted to bring what I saw home with me,” he says.

But while beginning to build the brand, John became frustrated with the lack of art and décor options available in America. That’s when he and his brother, Dave, decided it was time for their first Margaritas sourcing trip to Mexico.

“All I know is that I wanted to bring authenticity to Margaritas and provide guests with art and décor that they couldn’t find elsewhere,” John says. The brothers walked around various markets and warehouses collecting light fixtures, old wooden chairs – anything that they could get their hands on that ‘spoke’ to them. “I don’t go into sourcing trips with a particular vision,” says John. “I let the pieces find me. When I see it, I know it. ‘That’s Margaritas!’”

Revolutionizing the concept

For over three decades, as the brand grew, John continued with his sourcing trips to Mexico, with managers and staff also traveling to visit artist communities and manufacturing towns. John even used the same chairmaker for over 20 years, which speaks volumes about Margaritas’ authentic franchise concept.

One of our main areas of focus will forever be recruitment and retention of the best people”

In fact, there couldn’t be a more accurate expression than the one Bob Ray, COO of the brand, used to describe Margaritas – “a Mexican restaurant run by Americans in New England.”

“The biggest challenge ever seen at Margaritas was when we shut down all the restaurants in March 2020,” recalls Bob, who has been involved with the brand for 30 years. “We had to lay everybody off and there were five of us sitting around wondering if there was any future.”

But the brand came out the other side more resilient than ever. During the pandemic, Margaritas re-engineered its business model, eliminating the lunch daypart to focus on high-profit dayparts like dinner and late-night, reducing labor and food costs, and simplifying operations without sacrificing the quality of its products.

“I’d seen how lunch affected the business,” says Bob. “You take people that work doubles, for example. By the time it’s 7.30 pm, right in the middle of your business peak, they’re tired. They’re not prepared to do their very best and our people and their personality are the other really important piece in our success.

“Not having lunch allowed us to come in a more structured way. Everybody starts later and we do all the prep without the distraction of serving lunch.”

Optimizing back-of-house operations

Further streamlining the process, Margaritas also reduced its menu by roughly 20 per cent, which helped create efficiencies in prep, setup and execution.

Bob explains: “Over the course of 25-30 years, there were so many good ideas, we ran so many specials and we always added more things to the menu than we took away. This was a chance to come back, reopen from the shutdown and focus on supporting the teams. We wanted to do it with a really simple menu and then we expanded it a year later.

“There was a little bit of concern around some ingredients that we took away and people definitely liked. But it’s hard to dispute that it seems they’ve kept coming in!”

Work less, profit more

Another bold move Margaritas made when re-engineering its business model was to eliminate the least profitable day of the week – Monday. In an industry with constantly changing schedules, this went a long way in employee satisfaction by removing the unpredictability of time off.

“It’s hard to quantify and prove it, but our sales for 2022 match up very well with the full sales with lunch and Mondays from 2019,” says Bob.

“Going from lunch to dinner, I think people are having a better time because they are more likely to have a Margarita, which is a huge piece of what we do, spend a little more and relax a little more. But I definitely continue to believe that if we do a good job for people, they will come find us when we’re open.”

The changes to Margaritas’ operation have consolidated the brand as a lucrative business opportunity for investors, with the franchise seeking partners down the East Coast and also considering markets in the Northeast.

“One of our main areas of focus will forever be recruitment and retention of the best people,” adds Bob. “It’s important to me that the teams in the different restaurants feel connected to something bigger and not just to a corporate office.

“Margaritas has done all the work developing recipes over the years and this gives us a pretty cool foundation that’s unique and not easy to replicate. So, people should come to us to get our expertise if they want to be in the Margaritas business, for sure!”

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