Taco Bell's CEO Has a Formula for Success

0:00When someone comes to my door, I know, because I'm using SimpliSafe. I get an alert straight to my phone and I can see, is this someone I should unlock the door for because I know them? Or is it someone I need to tell to get lost? But here's the thing I love most about SimpliSafe. It works when I am not looking at my phone too, because when I'm not keeping an eye out, SimpliSafe is. SimpliSafe is proactive with a double layer of defense that stops crimes before they start. First, AI-powered cameras spot potential threats outside, and then live agents step in, talking to the person through the camera and letting them know they're on video and police will be dispatched if they don't leave.

0:44They can even trigger a loud siren or spotlight. That's how you help stop a crime before it starts. And SimpliSafe makes it easy to use. There are no long-term contracts, no hidden fees. You can cancel at any time. It was named Best Home Security Systems by U.S. News and World Report for five years running. It offers a 60-day money-back guarantee, so you can try it and see the difference for yourself. This month only, take 50 % off any new system. This is one of the best prices you will ever see for SimpliSafe, so don't miss it. Just go to simplisafe.com slash problem solvers. Again, that is SimpliSafe, S-I-M-P-L-I, S-A-F-E, simplisafe.com slash Problem Solvers and lock in your discount.

1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

1:59Is it easier to become the leader of a struggling brand or a super hot brand? A hot brand might sound easier. You know, it already has momentum. The fundamentals are strong. All you got to do is walk in there and things are already going great. But a full year ago, a full year ago. I talked to Sean Trezvant, who was becoming the CEO of Taco Bell. When we talked, he was just about to take on the role of CEO of Taco Bell a year ago. And I asked him that question because Taco Bell is a hot brand. And I wanted to know, what does he think? Is it easier to walk into this hot brand? Or would it be easier to walk into a brand that you know, is struggling.

2:47And therefore, you can notch some really easy wins. You can clean up some fundamentals and immediately see outcome. And Sean told me this a year ago. I don't think it's easier to walk into a hot brand because, you know, my job and our job as a Taco Bell team is to keep this brand hot. Because, you know, when the bar is really high, then every little dip is noticeable. It's like handing somebody something that is working perfectly and saying, don't screw it up. So that's what Sean was dealing with a year ago as he prepared to become CEO of Taco Bell. Now here's why I'm revisiting that moment today.

3:29Back then, at the beginning of 2024, Sean and I were talking for a very specific purpose. Every year in January, Entrepreneur Magazine publishes the Franchise 500. It is the definitive ranking of the strongest franchises. And last year, Taco Bell was number one for the fourth year in a row. Now it has been a year. Entrepreneur has just published the 2025 Franchise 500. And wouldn't you know it, Taco Bell is number one for the fifth year in a row. By every metric, this brand has remained strong. Same store sales grew by 4 % last year. International systems grew by 6%. And digital sales grew by 30%.

4:13It launched over 40 new menu items, including fun collaborations like with Cheez-It crackers and promotions like a menu of discontinued but beloved items from decades past called the Decades Menu. We'll talk about that in a little bit. But anyway, the point is, it was a great year for Taco Bell and an exciting validating first year for its new CEO. So I wanted to talk to Sean again now to ask him, first of all, what goes into keeping a brand like this continually smart and relevant? And also, what's it been like for him now that he has his first full year to reflect on? So we reconnected. Yeah, first of all, Jason, it's good to talk to you again.

4:53It's been a year. And what followed was a really insightful conversation about branding and brand building and brand strengthening, but also about the experience of walking into a very, very large role and having to orient yourself to it in many ways. This is Sean's first role as CEO. And also, he doesn't come from the restaurant world. So he needed to orient to that too. And so that's where we started. I asked Sean to reflect on his past year and what advice he would give a new leader who was a year behind him just about to step in to their first role as CEO. Here's what he said. I would say for somebody stepping into the role or unified, you know, we rewind a year for myself, I would say it's more about learn the role.

5:45The role is, you know, a lot of people, some people come from the outside, some people get promoted from the inside. Whatever way you get to the CEO role, to me, it's about learn the role. And all companies are different. But for me, it was going from the chief brand officer to the CEO. So much to my chagrin, I wasn't in charge of marketing anymore. I wasn't really in charge of the brand from a functional standpoint. And I had to learn that. I had to appreciate that. And I had to let my functional experts, whether it was in operations, finance, development, I had to let them be great functional experts.

6:20And I had to be the person who created the culture, creating the big swing environment to let them do their job and do it well. But I wasn't in charge of marketing. Now, it was a different role around vision, strategy, culture, people versus I'm in charge of marketing anymore. That's a hard transition for some people to kind of take the hands off the keyboard and play up. But it's a device I'd give myself till months ago and people stepped into the role. I would say just learn to make sure you're being the CEO and not a job you were in previously. Yeah, right. Because you said much to your chagrin because marketing is where you came from.

6:56So that's your comfort space. That's where you know exactly how you deliver value. And so it's hard to let go of something like that. Absolutely, absolutely. But on the flip side of that, while marketing is my, to your point, backtrack of strength, I grew up in the function. Learning the other function, make sure I'm added value to, whether it's development, whether it's finance, even whether it's working with Scott, an international or the US business, making sure I'm growing in those areas, asking the right questions is important as well. So that's just the start. We are covering so much ground in this conversation.

7:33We're going to be talking about why Sean wants Taco Bell to think of itself as a capital B brand, which is to say a brand that isn't just about its specific category. It's not just a food brand. It's not just a quick service restaurant brand. It is a brand building deep, personal, decades-long relationships with its consumers and transcending the products that it sells. We've got more great insights on leadership, on transitions, on growth. It's really great. Now, before we get there, number one, I want to tell you that if you are interested in what else is on the Franchise 500, well, you can go to entrepreneur.com slash Franchise 500 right now to find the list or just find it on newsstands wherever you get magazines.

8:19And also, you're going to have to wait a minute because we're going to take a short break. But when we come back, it is my conversation with Sean Trezvant, CEO of Taco Bell. All right, we're back. I'm talking with Sean Trezvant, CEO of Taco Bell, which just notched its fifth consecutive number one spot on the Entrepreneur Magazine Franchise 500. 100. Where we left off with Sean was he was sharing about how the most important thing that a new CEO can do is just learn the role, detach from the comfort of whatever role they knew before, and just understand the fundamentals of what is needed from them now.

9:00And when he said that, it reminded me of a conversation that I had had on this show maybe about a year ago with John Mackey, who was the co-founder and longtime CEO of Whole Foods. And well, I'll just pick up here as I tell Sean that story, and you can hear his response. He said that he attributes his long success at Whole Foods to his willingness to do one thing. And that was to constantly ask, what does the business need from me? And the answer to that is going to change. but usually that answer means moving away from a thing that he knew how to do knew how to do well which in his case right so you're talking about marketing in his case it was development he felt like he really understood real estate development he would be at every the site of every new location and he understood how to get these things up and going and uh uh and but sometimes that's not what the role required of him that's not what this the company required of him sometimes it required him to be just the spokesperson.

10:03And John actually hated that, absolutely hated stepping out and doing that. But he said that that's what was required of him. So he feels like the thing that separates a great CEO, well, there are many things, but like, you know, from this perspective, it separates a great CEO from a less effective one is the willingness to do what the company needs from them. And that's basically the answer that I'm hearing from you. Yeah, no, it's, John is very wise in that it's doing what the company needs of you and being able to listen. There's a lot of constituents, there's a lot of ideas and you have to listen to the different functions, the team as individuals, the team as a team, that listening skill and understanding where people are coming from and then being able to make a smart aligned decision.

10:49But doing what the company needs, but also listening to your team is very important as well. Yeah. All right, let's talk about some of the bring it back, bring it back stuff. Yeah. So when we talked last year, something that you had driven when you were chief brand officer was the return of menu items, the engagement of... I think you had set up a system where people were able to vote on which menu items to bring back, right? And this year, you've gone steps further. For example, there's the decades menu. Set us up. I better hear it in your voice than me about where Taco Bell has leaned into letting people engage with that sense of nostalgia that they have for the brand?

11:37Yeah. If you look at Consumer Insights, you see for many brands, but for Taco Bell, nostalgia plays. So a group of us, it was probably early first quarter, were sitting around saying, beyond to your point, Jason, through the app, you could vote on two menu items, you can bring one back. but we said, what would that be on steroids? What would that be? Um, and we had a little inspiration from, from, uh, uh, a famous singer who was doing an eras tour at the time. I think it came up like, what would be our eras? If we had to do an eras tour, what would be the headline act for the sixties, seventies, eighties and aughts?

12:15And, uh, you know, we, we sat around, we talked about what would be ours. Would it be the Mexi melt? Could it be the caramel empanada? Could it be the green burrito? And in true talk about fashion, we had a lot of fun. So we said, we originally called it Eras, but as you can imagine, that had some trademark restrictions to it. So originally it was just going to be called Decades and we were going to have merch in a cup from each decade because people not only love the food, they love the merch as well. So it originally started, let's do Eras, let's do a collectible cup and let's do some really cool merch from each decade.

12:53But the team kind of took it a step further and said, what would headline the decades menu? So that's why you get the gordita. That's why you get the soon to be caramel empanada. That's why you get Mexi melt. Some of these classic and you can, you combine classic Taco Bell menu items with great merch. We've seen incredible results and the consumer is deciding and it's a really fun thing. And the great thing about us is we can bring it back. There's so many great items on the Taco Bell menu. You can bring it back this year, but you can always bring it back again and again, because there's so many great menu items and we'll have a twist to it next year, but there's, there's some, there's a lot of fun things we can do with it and that we're doing with it today.

13:31That's really fun. The merch thing is really interesting to me because it's one thing to sell food because, uh, you know, everyone needs the food and it satisfies a immediate desire. I'm hungry. I want that. I want that item more than that item. Merch is something different. Merch requires someone to love and connect with your brand enough that they basically want to become a billboard for it. If somebody is wearing a Taco Bell t-shirt, they're wearing a billboard for Taco Bell. So it has to say something about them such that they're willing to do that. I'm curious, as a guy who understands consumers and marketing so well, how do you engage people or how do you approach merch in a way that...

14:20I don't even know exactly the question that I'm asking here, but I just... I really... I want to hear you talk about how a brand can engage people in that way beyond their core offering, right? Taco Bell makes food. People love the food. That is so clear. You don't even need to question it. But the merch is a different thing because the merch requires a very personal relationship with the brand, which means that you have to be thoughtful about fostering that relationship. And then you have to be thoughtful about creating things that will amplify that relationship. And I'm curious how that plays in your head.

14:59It's a great question. I would say this, Jason, I think when you said it, a brand says a lot about who you are as a person. The example I'll give is I love food, but I'm not going to wear my favorite steakhouse t-shirt. When I worked at Nike, I would walk around in my travels and people would be like, where'd you get those shoes? There was the most amazing shoes in the world. And it says a lot about who I was because I worked at Nike and I'm a sneaker head and that's the way I grew up. I would tell you when I were a born and raised hoodie or a decades hoodie people, I wore a Taco Bell coach's jacket the other day and somebody asked to bite off me.

15:40And that's, that's when I think the best way to describe is you got, you got to hit people in the head, right price, right strategy, good food. But when you hit people in the heart, that's when the merch sells. When you, when people are so passionate about your brand that they're going to wear a hoodie, a jacket, something that says, I am with team Taco Bell, I represent Taco Bell, you know, you've, you've done more than, than sold price pointed value menus, which is important. That's when, you know, you've hit somebody in the heart and really, uh, provided a relevance for them. That's outside of, I just eat the food, but I'm part of the brand.

16:21I'm part of the cult, which is a different level, which most brands aspire to. And I think we're well on our way to doing that with many, many people around the world. what do you think is in the head of the person who wanted to buy that jacket off of you and i don't mean that in like a crazy way like but i mean like okay that person wants to wear that because it says something about them right like that's that's why we wear things is because it broadcasts something so um if you could if you could put yourself in that person's head maybe thinking about like the ideal thing that you want people to, or that you have found that people associate with Taco Bell for, I'm not sure that that sentence made any sense, but you understand what I'm saying.

17:06Um, like what, what is that person? I speak your language. I speak your language fluently. I appreciate that. I'll just, I'll just ramble on for a bit and you'll say something smart and that we'll call it a day. Um, what is that person broadcasting about themselves by wearing the Taco Bell jacket? I was in an airport and my flight was a little delayed. So I sat down in a restaurant and he was a server and I could see him walking back and forth. He never asked me my name, never asked where I worked. He just said, man, that is a cool jacket. That's what he said first. Then he kind of went back and then he brought my food.

17:42And I was signing the check to go catch my flight. He said, how much do you take for the jacket? and it caught me a little bit off guard because he was at work and I just said it's not for sale and he's like everything's for sale and I said no it's not for sale it has meaning to me and that's all I said I didn't I didn't say my job title didn't say my name I just said it has a lot of meaning to me and he said I get it very cool jacket you know where I can get one and unfortunately I was going to take it off my back and give it to him uh but if I see him again I will what I said it has meaning to me.

18:18And unfortunately it was a limited run. And he said, I'm a, and he leaves with, I'm a big Taco Bell fan. But I just thought it was cool. And there's, there's many, many moments like that for the brand. And, and that's where, you know, I give our brand a lot of credit because it's not just about us being a great food brand in the QSR category. I've always said, I want to be just a great big B brand. I don't want to be, you know, asterisk, you're a great brand within QSR. I just want to be a great brand. And when you're a great brand, you don't have the box of QSR. You don't have the box of food.

18:51You can just do things that are cool and different that all great brands do. Yeah. Don't forget about the microphone on the... Yeah. I got excited. I got excited. Yeah, I know. That's good. I appreciate it. I'm talking about the brand. Yeah, I appreciate the energy.

19:08There was something I was going to say, and then I I sidetracked myself with the microphone. Let me see if I can find it back. Yeah. Can you, as someone who thinks deeply about brands, can you unpack that distinction for me? Because I think it's an important one for people to hear. How are you thinking about the difference between being a great quick service brand versus just a great brand? What does that actually mean when you're talking about brand? Yeah, I'll start is that all brands need to have great businesses. So we need to take care of the P &L, so to speak. So, hey, how are our sales?

19:44Are we winning in development? How's the profit line look? We've been around 62 years. We want to be in around another 62 years. We need to have a great business. But if you have a great business or when you have a great business, you also have a great brand. There's a lot of great businesses that don't survive because they don't have a great brand. They're very transactional. What we aim for is to have a great business that people love and is very profitable, but also have a great brand as well. And to me, a great brand is one that people have emotional connection to. There's a lot of businesses in your daily life that are very transactional, and those are fine.

20:23But we want to be a brand that we have a lot of transactions, but we also have a lot of emotional relevance with our consumers. And I think when you can pivot those two things together, that's when you become a great brand. If you look at great brands out there in the world, whether it's Apple, Spotify, Google, they're great brands that do great businesses, but they're brands that people are emotionally connected to. And that's what we strive for. It's not just about, I always say, it's not just about price-pointed value. It's not just about LTO that comes in and out. It's something that somebody has an emotional connection to day in and day out.

20:58That's when I think you're on your journey to become a great brand. And the distinction, as I'm hearing you talk and then thinking about how you made that distinction between a great brand and just a great category brand, is that being a great category brand could mean that you just do a really good job of maximizing and optimizing the opportunity in that category at that moment. And so there are a lot of great brands out there like that that, that, that sees upon something that works right now. But if you're not a great brand, then you might be stuck within the confines of that category and the whims of that category.

21:41So if people consumption habits change, then maybe you become less relevant to them. Um, If, you know, but what you're saying is, look, if people think of Taco Bell not as just fitting inside of some box that's part of their day, but rather as just a thing that they relate to regardless, that, you know, that guy who wants the jacket, he doesn't want the jacket just because he was hungry sometimes. Yeah, right. Because he wants it because at all times, no matter what is happening, he is happy to broadcast his affiliation with Taco Bell. That goes beyond category. That goes beyond need. That goes beyond context, which is a much, much harder hill to climb.

22:28And well, very well said. And those, when you become a great brand, that's when people post about you. That's when people make TikToks about you. That's when people tell a friend. That's when people want to try your food, your new LTO, and try it right in the drive-thru. There's a difference when people are mostly connected versus I'm just going to go get the food because I'm hungry versus I'm going to go tell the world through social media or other means that I'm connected to Taco Bell. Are you ever tempted to, in moments like that, be like, hey, also I'm the CEO of Taco Bell? No. If you talk to the team, it's pretty funny.

23:09A lot of times I try to, believe it or not, keep a very low profile. There's been times when I went to an airport and somebody said, because I had on the same Taco Bell jacket, matter of fact, and he said, he was the security guy putting people through the metal detector. He kind of gave me a look and I'm like, did I have water? I'm patting my pockets to my phone. He said, no, you're the CEO of Taco Bell, which I said I did. We took a picture and it was great. But I try to just, it's about the team, not me. And I try to keep a low profile as possible, which is getting harder and harder. Yeah, right.

23:46That is the hazards of the job. Let's go back to nostalgia for a little bit, because I was thinking about how smart you have been about engaging people's long-term love of this brand. But I imagine the downside of that is if a brand leans too heavily in nostalgia, it becomes a nostalgic brand, becomes a brand that was relevant and people would love it. And that's not to say Taco Bell is anywhere near that. You're clearly not. But I'm curious what you have thought about as you've thought about how do you engage nostalgia without broadcasting that you're a nostalgic brand? Yeah, I think all the great brands can weigh the scales on when it's appropriate to go back to the past and celebrate an era, a decade, and how you keep pushing forward.

24:41for us make no mistake we're pushing forward with with new we call them cps category entry points whether it's desserts beverages we need to keep pushing forward to the future even the way people experience our brand whether you're a team member in the back of house consumer front of house we need to keep pushing forward we want to be a modern brand that that that is um relevant consumers both menu and experience but there are times because we have the fortune of being around 62 years of bringing back stuff to probably both surprise and satisfy our consumers on the full experience of Taco Bell.

25:18Like I said, there's a lot of people who love the new menu items such as Crunchwrap, it's foundational, but Cheez-It or Street Chalupas. But then there also, when we can bring back the Mexi Melt, I think you combine that great, we'll call it future of the brand, but surprise and delight of the past of the brand. And I think those two things together, invite a really, really cool space for a brand to be in. A lot of brands can't go back to the past, can it go in the future? We're a brand that we feel like we can do both. It's almost like you're able to, as a prescription for a brand, you're able to look backwards when you are walking forwards.

25:59And what it does also, there's a lot of people, my kids included, who's never tried a Mexi Melt. So when you think about that, you know, Gen Z, who maybe has heard about a Mexi Melt or Green Burrito or Gerdita from their parents, now they get to be part of the experience of this is different. It's not the menu today. It's made from the past. And it's just as good as it was 30 years ago as the menu is today. The Cheez-It thing is really funny. Like I laughed out loud when I saw the Cheez-It. Can I just, in your own words, can I have you describe the Cheez-It? Cheez-It is a Crunchwrap, one of our most iconic items with a 16 times Cheez-It inside of it.

26:44It's delicious, crunchy, surprising, interesting, all-in-one, and very portable. And I would say for us, zigging when others zag, you look at, take our most iconic form, which is a crunch wrap and something new and interesting like a cheese it which is gen z's number one cracker you combine those two things pretty special and pretty interesting and it was an lto we knew it wasn't going to be a permanent part of the menu but but again for a brand that that can be fun and and be different it was something the beauty about talk about a lot of things we do green burrito cheese it street chalupas a lot of brands can't do or don't do Yeah, the thing, just to be clear, that I laughed at with the Cheez-It was seeing the giant Cheez-It.