In a bizarre turn of events, Del Taco has closed down most of its operational locations in Colorado, which is now represented by a single store in Grand Junction. These sudden, unsolicited, shutting off has stunned the staff and the customers with little to expect of being made clear.
A well-known fast-food establishment chain that sells a wide array of tacos, burritos and American food, Del Taco, with 19 locations, had a presence in Colorado. In the case of these companies, both the phone lines and online orders had been cancelled as of Thursday morning. The only other site that is still open is in Grand Junction and it is still serving loyal customers in that area.
Sudden shutdowns are mainly due to the bankruptcy of the franchisee, involving 18 stores in Denver and Colorado Springs. According to reports, the franchisee went bankrupt, resulting in the shutdown of these locations. This shift in the landscape has been experienced not only by the customers, but has also led to a massive number of jobless workers, raising fears about the general economic consequences.
The breaking and halt have startled many people in the community. Regular customers routinely visited their neighborhood Del Taco, but found it shuttered, with no warning. Because of this closed environment, there have been anxieties about corporate governance and the focus of the company on its customers.
Established in 1964, Del Taco represents a unique fixture in the restaurant sector that proposes the fusion of the Mexican-inspired dishes and traditional American-style plates. The chain has approximately 600 sites in the United States, however, mainly in California. Current state site shutdowns as documented are a significant reduction in the geographic area that the state constitutes and these site shutdowns occurred subsequent to a long period for the outlets in the state.
The financial trouble behind these closures is not a one-time event in the fast food business. Economic driving forces including increasing operational costs, increasing competition, and changing consumer activity have been placing stress on certain ranges. Under such conditions, restaurant failures and restaurant closures, i.e., Del Taco restaurants in the state of Colorado, serve as a practical example of general health and trends across the restaurant industry.
To those employees that are impacted by these closures, where they lose their jobs, immediate threats are presented, namely the employment discontinuity. There is a need for a new tool for people working in a very competitive market. Because there is no early warning for this, the damage is even worse, with very little planning for workers.
Customers, too, have expressed disappointment and frustration. For instance, in Colorado, Del Taco already had an existing base of repeat customers, who loved the "always available" nature of Del Taco's more out of the box menu offerings and a higher density of convenient store locations. Unforeseen power cuts have disrupted established eating patterns and vacated the space occupied by the community fast food industry.
This is the only one of any Del Taco in Grand Junction and to them, it is now the edge of the world for any Del Taco fan in Colorado. How this site can scale up to handle high demand is yet to be considered and whether this site will be able to bounce back from the more generic financial pressures across the brand is yet to be seen.
Judging by market observers, because of shutdowns, Del Taco may want to revisit its business model, an evolution that will not only be necessary, but also in the world of markets that franchisors struggle to sustain, a sensible evolution to make. This may include revisiting franchise agreements, extending the support to franchise owners, or further reorganizing operations in order to prevent further, ultimately shutting down.
The Colorado experience is a cautionary tale to other franchises operating under a similar model. The financial well being of franchisees is one of the most important determinants of success in brand creation and customer credibility. Since the fast-food industry is becoming more and more dynamic, flexibility and anticipatory management will be very important in upcoming crises.
However, within the week prior to that week, residents of Denver, Colorado Springs, and areas served out of nearby Del Taco restaurants are on their own. It is not known how much the impact of these shutdowns will be on the brand's footprint in the state of Colorado, and only time will tell how Del Taco will address the challenges that led to this major gap in the state of Colorado.
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