Rodney Anderson, president and founder of the fast-casual Mexican chain, discussed a back-to-basics focus on unit-level economics
For Iowa-based fast-casual chain Pancheros Mexican Grill, fiscal 2025 was about rebuilding and focusing on growth during a challenging economic period. The company has nearly returned to pre-inflation margins after leadership focused on getting back to basics, such as improving unit-level economics.
“A couple of years ago, I wouldn't have said that was possible for a while,” Pancheros president and founder Rodney Anderson said in an interview after the company’s annual franchise conference ended. “With some of the industry pressure on pricing from the consumer, we were a little bit worried about the ability to raise prices, but we are doing great so far.”
As Pancheros becomes more digital-focused, Anderson said, it adds about 3% to 4% to total cost of sales. The company had to adjust expenditures elsewhere to compensate, including through pricing increases. Anderson said that because the company was conservative with pricing during the COVID-19 pandemic, Pancheros was able to raise prices in recent years without alienating customers.
Beyond pricing, the company also switched vendors and suppliers to renegotiate better prices for franchisees.
These adjustments to the fundamentals have allowed Pancheros to focus on other initiatives, such as new marketing campaigns. That includes Pancheros' partnership earlier this year with former college football player and WWE star Ettore "Big E" Ewen, which Anderson called a "fun campaign" that created significant engagement with college football fans.
Pancheros is also becoming more digitally native.
“Customer satisfaction is up, employee satisfaction is up, while employee turnover is down,” Anderson said. So that's been a big part of what we've been doing the last few years is putting in separate digital-only lines, which improves our digital sales and employee morale. We’re working on timing those [digital investments] with our franchisees and making sure the numbers make sense.”
Looking ahead, Pancheros will focus on expanding to different regions, including Missouri, Iowa and Illinois, through new franchisee partnerships. That includes the company's recently announced agreement with Jeremy Music, who is known for his development work with Smalls Sliders and Wingstop.
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