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Del Taco Relaunches Brand with Refreshed Restaurants, New Menus and More! Q&A with CEO Paul Murphy

Del Taco, founded in 1964, is among the nation's largest and most popular Mexican quick-serve chains. With more than 550 restaurants in 18 states, the company, based in Lake Forest, CA, recently debuted a new advertising campaign and menus as part of larger plan to refresh and redefine how customers view the Del Taco brand, its products and its service.

Also recently, the chain's parent Del Taco Holdings Inc. completed a $215 million debt refinance transaction featuring new senior credit facilities that include a $175 million term loan and a $40 million revolving line of credit. According to management, the deal significantly lowered interest rates and improved the capital structure, allowing for greater investment in the brand and growth into new markets. asked Paul Murphy, Del Taco's CEO, about all that is happening.

Q. Why does Del Taco need to redefine how customers view Del Taco?

Del Taco is a strong brand with a great heritage and a loyal base of fans. While we've always received top marks for our value and variety, we weren't getting credit for the lengths that we go to deliver quality on our menu through freshly prepared ingredients and a made-to-order approach. In fact, this is the reason our food tastes better. We wanted to be more aggressive about telling our customers that at Del Taco, not only are you getting great price value, but also wonderful quality at a great value.

Q. What all are you doing to accomplish this?

In late 2011, we initiated a plan over two phases to break down the barriers that were causing customers to ignore this major point of difference about us, that is, the quality of our food as well as the value. The plan focused on Del Taco's operations and facilities in the first phase, and the menu and marketing in the second. Of the plan's changes and improvements are a refreshed brand identity and image; customer-focused operational improvements; and the new ad campaign and menu platforms. In these changes and improvements, we are reinforcing the reasons why current customers love our brand, and we're giving them new reasons to believe. Also, we're inviting other to give us a try or reappraise Del Taco.

Q. How have the restaurants changed?

To begin with, we realized that all of the best marketing and menu innovation in the world wouldn't have the lasting impact we wanted unless it was backed by a significantly improved restaurant experience. Our first priority was upgrading our facilities. So, for the restaurants, we focused on a scalable reimaged restaurant design program that first included a new logo. This is the first major facilities refresh in 20 years. We've updated and modernized our interiors and exteriors, utilizing contemporary colors and expanding on the brand freshness theme. As of today, more than half the chain as been reimaged with the entire system to be completed in 2013.

Q. How do you convey "freshness"?

Customers will find different visuals, or freshness cues, throughout, telling Del Taco's food story and reinforcing familiar messages. For example: marinated chicken is grilled fresh throughout the day in each kitchen, beans are slow cooked from scratch and take three hours to prepare, and cheddar cheese is freshly grated in Del Taco kitchens from 40-pound blocks.

Q. How have you changed the way you operate?

We've made some internal organizational changes. This includes aligning company and franchise operations under a single leader to enable the leveraging of best practices and to ensure delivery of the optimal customer experience at every restaurant. We created a new role, senior vice president of operations support and engagement.

Q. Operations-wise, what will customers notice?

We've updated many key processes and procedures to focus operations on delivering an outstanding customer experience. For example, we've placed a heavy emphasis on training and developing strong customer-oriented restaurant teams. We've also implemented improvements to customer service designed to increase speed and accuracy without sacrificing quality. One specific initiative is the Guest Measurement Tool, where guest surveys generated at each restaurant will provide both brand and operational insights that will drive a focus on continuous improvement. One of the great things about being a manageable chain is that we can be fast and nimble. We can really listen to our customers.

Q. Speaking of customers, what'll they see as far as your menu goes?

First of all, let's remind everyone that the Del Taco menu includes burgers, fries and milkshakes alongside Mexican dishes like burritos and tacos. Our new revamped menu now includes two new platforms: Buck & Under and a New Tastes lineup.

Q. Buck & Under?

While the rest of the QSR category is focused at $1 price points for value menus, Del Taco will differentiate with prices like 50¢, 75¢ and $1. The new Buck & Under menu offers the best price value variety in the restaurant category. With 11 items priced starting at 50¢, this menu includes a Mini Cheddar Quesadilla, Value Bean & Cheese Burrito, Regular Taco, Mini Bacon Quesadilla, Jacked Up Value Bean, Rice & Cheese Burrito, Crunchy Chipotle Beef Taco, Grilled Chicken Taco, ½-Pound Bean & Cheese Burritos, Double Beef Classic Taco, Real Strawberry Lemonade and Medium Size Freshly Brewed Iced Tea. Paired with our fresh ingredients and made-to order-approach, the New Buck & Under menu is a great representation of the superior quality and value that our brand can offer.

Q. What's on the New Tastes menu?

The New Tastes section will initially bring three new flavorful products to the Del Taco menu, with plans to refresh this section regularly based on customer demand. New Tastes will include a Bacon Ranch Grilled Chicken Taco, a Chili Cheese Fry Burrito and a Fiery 6 Layer Burrito. These products carry unique flavor profiles that only Del Taco can deliver due to its fresh ingredients and signature recipes. New Tastes items will rotate, and those that win favor among consumers may be added to the core menu.

Q. You're new communications strategy and advertising campaign has the tagline, UnFreshing Believable. Where'd this come from?

Del Taco Relaunches Brand with Refreshed Restaurants, New Menus and More! Q&A with CEO Paul Murphy The genesis of UnFreshing Believable comes from customers who found it virtually unbelievable upon hearing about Del Taco's fresh ingredients at such low prices. They also found it very motivating and said it was a story worth telling. The strategy and campaign underscore the "fresh-for-less" positioning and will promote the new menu offers. Credit goes to our agency of record, San Francisco-based Camp + King, for the creative way they've been able to communicate and bring to life Del Taco's new brand strategy.

Q. What else are you doing in addition to the advertising campaign?

The comprehensive communications plan includes packaging, POP, merchandising, out-of-home advertising elements, social media, and digital, radio and television ads, that all have been redesigned to tell the new brand story and showcase the food.

Q. What's your goal in this brand re-launch?

People have always come to Del Taco because they loved the taste of our food, but now, when the connect the freshness to the reason for why it tastes so good, it reinforces our brand position and gives them reasons to visit more often. It's our goal to be the top choice when customers are looking for great Mexican food at a great value. We believe our new brand positioning and customer strategy will ultimately get us to that top spot.

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