Desert Moon Rises

Desert Moon Rises
Tags: Franchising & Growth, Fresh Mex
March 7, 2007

* From the Feb./March edition of Fast Casual magazine

Desert Moon doesn't try to be like the rest of the fresh-Mex world.

While Qdoba and Chipotle started in the West and expanded eastward, and Moe's Southwest Grill set up camp in the South and traveled North, Desert Moon planted its roots smack in the middle of New York.

"The (East Coast) people just love the fresh-Mex concept because they are used to Taco Bell and ma and pop Mexican food," said Gary Occhiogrosso, president and chief executive, who served on the Dunkin' Donuts franchisee advisory council and helped develop Ranch One's franchise program.

Much like large-scale competitor Chipotle, Desert Moon takes its cooking styles and ingredients very seriously. The menu fuses Southwestern and fresh-Mex cooking methods, and all items are made to order with many ingredients ripened on premises. The 100-percent natural, preservative-free menu is prepared with few fatty oils and without frying.

This healthful menu puts Desert Moon at the forefront of a healthy eating trend that is quickly gaining national momentum, said Erica Bohm, vice president for Healthy Dining and healthydiningfinder.com.

"Desert Moon provides diners with health-conscious choices that not only meet nutrient needs, but also taste fantastic," Bohm said. "Their innovative menu allows diners to create their own meal from a wide variety of ingredients — flavorful salsas, fiber-rich beans and grilled, skinless chicken breast."

Variety is key to Desert Moon's menu. In addition to tacos, wraps and typical fresh-Mex fare, sandwiches are big breadwinners for the chain. According to Technomic data, Southwest Pressed Grill Sandwiches account for 10 percent of the company's overall product mix. Served on whole-wheat flatbread, these sandwiches are available in several varieties, including The Cubano and Sliced Turkey Breast & Fresh Spinach.

The beverage menu includes margaritas, beer, soda and smoothies.

"We're definitely not like our competition, and we don't try to be," Occhiogrosso said.

Another differentiator is that Desert Moon's food is served on ceramic tableware rather than wrapped in foil. "We try to be as close to full service as possible," Occhiogrosso said.

Slow growth, long-term reward

In 2003, Entrepreneur magazine named Desert Moon one of the Top 50 New Franchises. At the time, there were only a handful of stores open.

"We took seven years to get from seven units to 20," Occhiogrosso said. "We've been extremely cautious."

For its franchising program, the brand targets experienced multiunit operators with a net worth of $1 million.

"As with most emerging brands, in the beginning, you sell to individuals," Occhiogrosso said. But once the brand was more established he began to look for experienced operators to come in and take a multiunit package.

He said the company never wanted to be one of those brands that make grandiose claims, such as opening 1,000 stores in five years.

"We do not measure the success of our franchise system based on franchise agreements sold," the chain's CEO said. "We base our success on unit performance."

An interior shot of Desert Moon.

According to Technomic data, Desert Moon has grown at a rate of 25 percent. And Occhiogrosso said the 2006 sales trended positive.

"What drives the numbers is the fact we are an East Coast-based company and that's our focus," Occhiogrosso said. "Fresh Mex is relatively unknown here."

Brand identity

Sam Wang is a single-unit Desert Moon operator near Washington, D.C. He said his biggest challenge is brand awareness.

"People coming in don't know the name," said Wang, who also operates an Original Soup Man. "A Baja Fresh might do twice the volume as us. As a small franchise, it's hard to attract people."

Wang's store is little more than a year old, and he believes the customers don't always understand its fresh-Mex concept.

"We're not as mainstream as the pizza and burger categories. But as one of the players in the Mexican arena, I'm pretty confident in our future," Wang said.

Wang believes in his franchisor's business acumen, too. The chain's 2007 marketing initiatives center on educating consumers. Desert Moon's message, "The Fresh Healthful Alternative to Fast-Food," will be supported by print, freestanding inserts, direct mail and new Web site and e-mail marketing.

"Once you set a brand position, everything, whether it's a burrito, a Web site or real estate, it all needs to match," Occhiogrosso said. "And for us, the brand position, the marketing efforts, the franchising, it all starts with guest satisfaction and guest experience. That's what drives the ship."