--- title: "Inside Torchy’s Tacos’ smaller, smarter reset" url: https://burnaze.com/article/acd73976-0bcb-44e3-89ac-43f8c728d935 source: "Restaurant Business" original_url: https://restaurantbusinessonline.com/financing/inside-torchys-tacos-smaller-smarter-reset category: "Mexican" industry: "Restaurants" segment: "Mexican" published: 2026-10-26T16:06:37.000Z modified: 2026-10-31T14:58:01.506Z image: https://cdn.informaconnect.com/platform/files/public/2026-10/background/23Springs_-110.jpg?VersionId=7l3OI2oU6FyU5FJlz5j6oo9ZAOdrKkW3 --- # Inside Torchy’s Tacos’ smaller, smarter reset **TL;DR:** Torchy's Tacos has introduced a new restaurant design, T2, which is more efficient and smaller than its previous locations, and has brought in new leadership, including CEO Paul Macaluso, to help the brand grow and improve its operations. The brand has closed underperforming locations and is focusing on concentric growth, with a goal of opening three to six new restaurants next year. *originally published in Restaurant Business on 2026-10-26. [Read the original](https://restaurantbusinessonline.com/financing/inside-torchys-tacos-smaller-smarter-reset).* ## Story Right around noon on a hot Thursday in early October, scores of office workers poured into a brand-new Torchy's Tacos in the 23Springs development of Uptown Dallas. The staff is clearly used to this midday rush, moving through a dizzying number of on- and off-premises orders — like a well-rehearsed back-of-house symphony — to get customers back to their desks on time. The General Manager, Manny Gaytan, is the maestro, making sure to-go orders are sequenced and accurate. He previously worked at the Torchy's location near Southern Methodist University and took advantage of a promotional opportunity when the chain's new Uptown location opened in July. Three of his colleagues at the new location have been with Torchy’s at least 10 years, and they’re used to such peak-hour chaos. ## New restaurant design The others have been able to learn quickly, thanks to the brand's new restaurant design, called T2 and introduced last year. It’s more efficient than Torchy’s first-generation restaurants, with new ovens and equipment positioned more closely together to bolster throughput and make employees’ lives easier. The restaurant is much smaller, too — between 2,500- to 3,200-square feet versus 4,500- to 5,000-square feet before. “Our restaurants got too big and we really needed to make some adjustments. We wanted to make sure the design was close to our scratch-cooking roots and so we reintegrated prep into the line,” Torchy's Founder Mike Rypka said during a recent interview. “The financial benefits of having a smaller restaurant are great, but so is staying committed to our food quality and freshly prepared food.” Though the design is compact, there is no shortage of indoor and outdoor seating and the bar remains a focal point to support the idea of cultivating a community, which is exactly what Rypka envisioned when he began selling tacos from a single food trailer and a red Vespa 20 years ago. Torchy’s has since expanded to 120 restaurants across 15 states, generating a cult following of consumers enamored by its “Damn Good Food,” which became its motto after Rypka observed his early customers repeating the sentiment. Now the brand is ready for its next chapter of growth. ## Leadership changes Rypka brought Paul Macaluso on last year as CEO, reluctantly handing his “baby” over to an industry veteran with more than 35 years of experience at brands like Taco Bell, Burger King, Sonic, Moe’s Southwest Grill, McAlister’s, Krystal, Another Broken Egg Café, and more. (G.J. Hart served as CEO from 2018 to 2021, but otherwise it’s been all Rypka). The two then brought on even more executives, including Chief Marketing Officer Jennifer Anderson, who had previous stints at Raising Cane’s, MOD Pizza, and Darden, and Chief Financial Officer Natalie Harden, who has experience with Condado Tacos and Chuy’s. This leadership transition was critical to right-size a system that had grown too far too fast and reposition it for growth again. Torchy’s ended 2025 with 125 locations, marking a 4.6% year-over-year decline, according to Technomic. Sales slipped by 3.4%. The brand has since closed five more locations and exited Georgia. “I knew bringing in a fresh perspective had to be done. We just didn’t enter new markets the right way. They weren’t the best sites, they were too big. We weren’t going to make money,” Rypka said. “And we didn’t get off to a good start operationally because we grew too fast.” A couple of years ago, Torchy’s opened 17 restaurants on a base of 80 existing locations, for example. Macaluso said the company is now approaching growth more pragmatically. It is opening just three restaurants this year and aiming for three to six next year. Macaluso’s initial priority has been to improve the health of the brand, or to “clean things up,” as he references often. That meant the new, more efficient restaurant design and a focus on “concentric growth.” It also meant better site selection and a tighter menu. And, with the intentional closure of poorly performing restaurants, it meant a sharpened focus on the remaining locations. “We also have more accountability. We’re meeting every month on the new restaurants, specifically. We’re looking at how they’re performing, what help do they need, what needs to be changed for labor scheduling, when do we turn on off-premises and turn on catering?” Macaluso said. “We’re hyper-focused and taking critical steps to help us be in a much better place.” Macaluso said Torchy’s has improved its unit economics by over 300 basis points since this work began last year. ## Marketing strategy Not only has Torchy’s spent the past year-plus “cleaning up” those economics, it’s also been bolstering its marketing strategy to build brand awareness. “When I sat down with the board in 2024, we decided we especially needed some marketing help,” Rypka said. “We entered all these states and didn’t put a lot behind them in terms of brand awareness. If we were going to continue to grow, which has always been the plan, we’ve got to have that as a base so we’re putting our best foot forward in new markets.” Macaluso said marketing was 90% of the brand’s issue when he first joined and his first decision as CEO was to bring on a dedicated marketer. “I needed someone who could connect us to the local communities because we had abandoned field marketing,” he said. “I was lucky enough to find (Anderson) and she put field marketing back into place and understood digital, social, the architecture of the menu. By the fourth quarter of last year, we turned the corner in sales.” When Anderson joined the brand in July 2025, her initial priority — in addition to beefing up field marketing — was to simply tell the story of Torchy’s, including Rypka's vision, the brand's history, and its differentiated, made-from-scratch, chef-inspired menu. “This is a brand that has so many amazing aspects to it and it was never about trying to revamp or turn around something. It was about the connection we have with our guests and team members. Our main connection is our food,” she said. “We needed to go back to the roots of our brand and tell our story at a local level and get active in our communities.” As Torchy’s refined its marketing strategy, Anderson knew the restaurants themselves were going to be a major part of that story. It’s why the new prototype includes a lot of seating, despite an elevated off-premises business, and it’s why the bar remains front-and-center. “People connect over our food, and we want our restaurants to be that community hub where people can connect,” she said. Of course, Torchy’s is also investing in different media channels, including social media and influencers. The challenge, Anderson said, is figuring out which story to tell first. ## Menu innovation Typically, all of Torchy’s stories start with the menu. After graduating from Johnson & Wales University, Rypka cut his teeth as an executive and corporate chef for several high-profile corporations, including Enron, Disney Animation, and Dell. He’s been perfecting dishes for others as long as he can remember, but his ultimate dream was to open his own brick-and-mortar establishment. “I’ve always had a soft spot for street food. I could have gone the fine-dining route, but it wasn’t in my wheelhouse. It didn’t speak to me,” he said. “I wanted something approachable, affordable, but inspiring — not just what people were pulling out of a microwave.” When Rypka was serving as chef of World Bank in Washington, D.C., he got his first lesson in how to work with different cuisines and spices and ingredients. He saw a big opportunity with Mexican street tacos and went with it. “But it had to be something that would blow people’s minds, with flavors people didn’t expect would work well together,” he said. “I didn’t just want to follow the trends but do something that sparked innovation.” About 14 years ago, he brought on Chef Cheryl Drummond to help oversee Torchy’s culinary innovation. They had worked together at two previous stints before Rypka started Torchy’s and they kept in touch enough for him to ask for her help when Torchy’s began to grow. “I saw the energy of the brand and told him I was in,” Drummond said. “I've always believed in Mike and any decision that Mike is associated with, I know it’s going to be a good one.” Drummond said the team doesn’t just chase trends but rather focuses on seasonality and mixing different flavors and textures. The Scarecrow, for example, features a pumpkin seed-breaded chicken tender on a base of roasted poblano peppers and escabeche carrots. There’s also the best-selling The Trailer Park, with a hand-breaded, 48-hour marinated fried chicken tender topped with green chiles, lettuce, pico de gallo, cheddar jack cheese, and poblano sauce, and dozens more. Torchy’s features a different Taco of the Month so customers have plenty of reason to come back. Rypka calls the promotion a “natural innovation tool” that inspires the team to constantly try new things. There are maybe 60 tacos now “in the vault” that have previously been featured as a Taco of the Month, and that the brand can recycle any time. Beyond the vault, Drummond and Rypka keep their wheels turning by going shopping together at the grocery store or markets. They also both travel a bunch and are constantly texting each other ideas and photos of their meals. “We’re always out, trying new places. I always want the food to come from an inspired place. To do that, you’ve got to be out in the world and put yourself in places where you can get inspired,” Rypka said. Beyond the menu, Torchy’s hangs its hat on its culture. This is where Rypka exudes the most pride, noting often that the company has a high retention rate. In addition to making chef-inspired food accessible, his goal in starting the company was to create opportunities for people. “I worked in the corporate world from Marriott to Sodexo for a long time and I watched a lot of talented cashiers and cooks and there just wasn’t a lot of opportunity for them,” he said. “I wanted to create a place where they could get a career and move up. That’s been the best part about this whole thing.” He doesn’t plan to change that much as the brand enters its next 20 years. “I still want to provide opportunities, and not just inside our restaurants but also in the communities,” he said. “I want to continue being an inclusive brand with employee and community buy-in.” This objective was crystalized when he was just 22 years old working at World Bank, where there were 26 countries represented on his staff of 76. “That’s where I started to understand different cultures and cuisines, and building inclusive communities. That’s when I learned if my staff didn’t love the food I was creating, it didn’t get on the menu,” Rypka said. “We all had to have buy-in, and I’ve kept that same idea at Torchy’s from the beginning and I hope it lives beyond me.” ## Entities - QSR (sector) - menu innovation (topic) - marketing strategy (topic) - Restaurant Business (publication) - growth strategy (topic) - Paul Macaluso (person) - leadership changes (topic) - restaurant redesign (topic) - Torchy's Tacos (company) - Mike Rypka (person) - Jennifer Anderson (person) - Natalie Harden (person) --- Originally reported by Restaurant Business (https://restaurantbusinessonline.com/financing/inside-torchys-tacos-smaller-smarter-reset). Summarized by Burnaze (https://burnaze.com/article/acd73976-0bcb-44e3-89ac-43f8c728d935).