Desert de Oro Foods

Diversified Restaurant Management
Written by: 
Jeanee Dudley
Produced by: 
Sean Barr

Desert de Oro Foods (DDO) is Arizona’s largest franchisee of Taco Bell restaurants. The company is owned and operated by a unique team: a brother and sister who have found growing success in the industry over the last three decades. Krystal Burge and Mark Peterson operate 80 Taco Bell franchises, 47 Pizza Hut franchises, as well as a variety of multibrand restaurants, which include six that offer the combination of both Taco Bell and Long John Silver’s menus, three that serve Taco Bell and Pizza Hut Express items, as well as one location that offers the tastes of both Taco Bell and KFC.

Burge and Peterson purchased their first franchise, a Taco Bell, in 1982 while attending Mesa Community College in the East Valley area of Phoenix, Ariz. They had planned to finish school while putting together a deal with the corporation that owns Taco Bell. However, not all panned out as planned.

“We thought it would be a much longer process,” says Peterson. Both he and Burge attended a three-day orientation and within a few weeks the entire process was completed.

Neither Burge nor Peterson had ever worked in fast food before, but the two had networked with some other local franchisees. The corporation offered the two entrepreneurs the option of taking over one location in Kingman or three locations in Amarillo, Tex. Cautiously, Burge and Peterson decided to start small by accepting the Kingman operation. At that time the savvy siblings left school and began building an empire.

Drive-thru Window of Opportunity

DDO currently operates 127 franchises in the southwestern United States, with most locations in Arizona. The company extended its reach into California and southern Utah in 2008 as well. “Each year we think we’re going to make it simpler,” says Burge. “It doesn’t really work that way, though.”

DDO employs over 3,200 people in the Southwest, who Burge and Peterson regard as the company’s greatest assets. “What really sets us apart is that we strive to build a culture that takes care of our people,” explains Peterson. “If they have the desire to grow in this industry, we try as hard as we can to provide opportunities to the people that work with us.”

The company’s main focus is service, paired with a dedication to creating happy, repeat customers instilled in the management at all of DDO’s franchises. This focus was clear when DDO started in the rural market in Arizona. “That kind of market gives you the opportunity to really get to know your customer,” says Burge. “In the food industry you have to build your business one customer at a time.” In small communities like Kingman, which has a population of less than 30,000, DDO franchises see a lot of repeat business because of well-mannered integrity.

The management’s philosophy for growth gives DDO franchises the upper hand in the market. Burge and Peterson believe that the one customer-at-a-time model has brought the business success in cities with larger populations.

Peterson tries to draw comparisons with other franchises to make improvements on the home front. “We take a look at the other Taco Bells, the competition,” he says. “If we see that they’re performing a component of the business better than we are, we figure out how to solve that. There’s no end game to how good we can be.”

Border Menu Politics

With a mentality of continually bettering the company, DDO has remained innovative over the years despite the challenges associated with the food industry. The recent economic slump in the United States has bumped up food prices, but as a chain establishment DDO has maintained the same suppliers.

“We don’t have flexibility in food,” explains Peterson, “We use a food cooperative that heeds the specifications established by corporate.” Even so, Peterson and Burge do not believe food pricing is the biggest obstacle. “We continue to maintain value in our products,” he says.

Peterson says that a good portion of the company’s challenges are related to government regulations. DDO operates mainly in Border States, where pressure to deport undocumented immigrants has resulted in the removal of many of the franchises’ customers. “At first we were concerned that we might lose employees if they had undocumented family members,” says Burge. “If they’re deported, sometimes their family members leave with them. We’ve actually seen a larger impact from our customers leaving the country.”

Through tough times, though, Burge and Peterson continue to strive to maintain nothing other than positivity in all of their restaurants. “We want to make sure our employees keep that ambition and make decisions that will help them at work and in their careers,” says Peterson.

“We continue to look at challenges as opportunities to improve,” adds Burge. “Every business has challenges, and in facing them we try to assess how these challenges will make us a better operator.”

And the positive energy is contagious; the management team at DDO is excited about a series of new products that have amped up business in 2012. Taco Bell released a Doritos brand Locos Tacos product. The Locos Taco is a standard taco on the inside, but the crunchy outside shell is one, large nacho cheese-flavored Dorito. “It’s been received very well,” says Burge, who explains that the corporation excels at moving customers toward new products. “The Locos Tacos item celebrates 50 years in business for founder Glen Bell,” she adds.

Additionally, Taco Bell has added a gourmet menu to its offering of fast, yummy Tex-Mex foods. “Celebrity chef Lorna Garcia is developing a new line of products for us,” says Burge. The menu includes the Cantina Bowl salad, a dish of fresh greens, cilantro rice, lemon-roasted chicken and gourmet toppings like fresh guacamole and pico de gallo. The Cantina Burrito employs many of the same ingredients rolled into a warm, flour tortilla. The new pico, roasted corn and red pepper salsa and guacamole are available on the side to dip Taco Bell’s crispy tortilla chips in. A tasty side of black beans and rice is now available, too.

At the company’s Pizza Hut locations, Peterson says the $10 Box Deal has been a big hit. The infamous box comes with a medium, rectangular one-topping pizza and five breadsticks with marinara dipping sauce. For dessert, the box includes 10 cinnamon sticks with a side of icing, even satisfying those with a sweet tooth.

DDO strives for excellence in business, and works to apply the same standard toward making a difference in the community. Burge and Peterson both serve on the boards for several community organizations, including the Boys and Girls Club. In each of DDO’s stores, a coin game sits on the counter where patrons can make donations and – if they’re lucky – even win some free food.

The company has built a reputation by treating customers and employees like family. Respect is a major mission point for DDO, and a focus that has earned the siblings a number of awards, including the Small Business Administration’s Young Entrepreneur of the Year Award. The company is scraping and rebuilding its original location for DDO’s 30-year anniversary, but the team is involved in several new construction and remodel projects. With these expansions, Desert de Oro Foods continues a tradition of innovation and community-mindedness into the future.

Strategic Partnership(s): 
Shamrock Foods
Udall Udall Casey Inouye
William Otwell and Associates