Pizza Patron: Smaller Chain Proving Recession-Proof

McDonald's isn't the only restaurant chain thriving despite the economy. Dallas-based Pizza Patron has seen consistently rising sales, and its first quick-service outlet, which opened three months ago in San Antonio, had a record opening week and became the top-selling store in the chain's history.

And this during a recession that has hit pizza chains particularly hard. But Pizza Patron has a unique niche: it caters to Latino customers, and its franchises are in predominantly Hispanic neighborhoods. Employees are bilingual in English and Spanish, and the chain even accepts Mexican pesos.

"Our brand is uniquely aligned with the youngest and fastest-growing demographic in the U.S.," founder Antonio Swad said in a recent press release.

But the primary fare is all-American: pizza, U.S. style.

"Today's Hispanics are largely from the second and third generations and are more acculturated, so we have a lot of influence from U.S. mainstream culture, including food," Wilson Camelo of advertising agency Bauza & Associates told the Los Angeles Business Journal.

He added that Latinos strongly prefer fresh food, and research shows Latino families lag behind the U.S. average in the consumption of frozen pizza, prompting the delivery chains to fill the need.

Pizza Marketplace reported a year ago that Pizza Patron had seen "five straight quarters of double-digit same-store sales increases," and sales have continued to grow. February sales were up 10.5 percent from a year ago.

But Pizza Patron hasn't been unaffected by the economic downturn. It recently launched the "Amigo Pizza" -- a pizza in a medium size. It wouldn't strike most as a very bold move, but previously the chain had gone 22 years selling only large pizzas. "Now we have two sizes," Swad said of the change, "and the value is even more incredible."

Domino's, Papa John's and Pizza Hut all offer online ordering in Spanish, and Domino's has a Spanish language hotline, but they're not devoted to the Latino market the way Pizza Patron is. "We are often asked about opening stores in non-Hispanic neighborhoods, but that will never happen," said Andrew Gamm, Pizza Patron's director of brand development. "We are fanatically dedicated to making a strong connection, and doing a better job serving the Latino-Hispano community than our competitors."

Company heads received death threats when Pizza Patron started taking Mexican pesos in 2007, but the move was popular with the customer base, and the chain has continued the practice, though pesos make up a very small percentage of its business.