116 3rd St SE
Cedar Rapids, Iowa 52401
Pancheros Mexican Grill started 30 years ago, it served what the fast-casual restaurant chain’s founder and president, Rodney Anderson, called a Chicago-style burrito.
“We have changed it up quite a bit since then, but when we opened, we offered these burritos that were a cult favorite in Chicago’s Hispanic neighborhoods, especially with young people,” Anderson recalled.
“Our original idea was to bring that to college towns. We came to Iowa City, and we were looking at several spots and that corner became available,” he said, referring to South Clinton and East Washington downtown.
“It was more expensive than other locations, but we stood on that corner and everybody was bumping into us. We said, ‘Well, we can't get out of the way, so this is the place we need to be’ and we need to make it happen. So we did, and it has been successful from day one.”
Anderson recalled that they knew selecting that first location was going to be pivotal.
“When I think back through the years, I have always said that downtown Iowa City is what made this thing possible,” he said.
“... It’s driven everything we've done. Being right there on the corner is the best location in town. And every student that's come through the University (of Iowa) and gone to Pancheros and then moved on to Des Moines or Minneapolis or wherever and visited a Pancheros in those cities is just a great thing.”
Anderson said it only took a few years for his team to realize they would need to adjust their business concept for growth.
“We started out thinking that would be a young-person, college-town concept,” he said. “We started opening restaurants a couple of hours away from Iowa City at the different universities in the Midwest.
“But we wore ourselves out. We were good at it, but it wasn’t an efficient way to manage things, especially with staying open late.”
The Pancheros team decided to expand their brand’s appeal beyond the college market.
“That's when we started pressing our own tortillas and upscaling the concept,” Anderson explained. The chain opened a few venues in Des Moines and in Iowa City but outside its core downtown area.
“We really started to see growth in more suburban areas, and from that we franchised.”
Today, Coralville-headquartered Pancheros has 72 locations in 12 states and continues to grow.
“I think there will be 74 stores by the end of the year in 13 states, if the supply chain cooperates for equipment,” Anderson said.
Learning the business
“It’s amazing that it has been 30 years, but it also doesn’t feel like 30 years,” Anderson said.
“When we started, I was working in a restaurant 90 hours a week and learning the business and how to make it grow,” he said.
“Since then, I’ve done every role from taking care of the real estate deals and finding new locations to working with the construction teams, selling franchises, handling accounting and advertising.”
The chain now has more than 25 corporate employees handling various aspects of the business.
“We’ve added positions along the way to support the growth of our franchise system, and they are fantastic. I just oversee it all.”
Having franchise locations, in fact, is now among Anderson’s proudest accomplishments over the decades.
“If you're not in this industry, it's hard to understand, but it's difficult to grow a brand and help individual franchisees be successful and get over the hump, and we've done that,” he said.
“... It validates our entire concept and makes our efforts feel worthwhile.”
Again, Anderson credits much of their growth with being headquartered in Eastern Iowa.
“Iowa is one of the most important things that happened to us,” he said.
“We didn't open this restaurant where there were hundreds of thousands of people so we’d have many customers, and it would be easy. We had to be good at what we did, and it shaped everything, labor-wise and product-wise.
“We had to please every customer and wanted everyone to come back so there was no one we could mess up on. It made us very efficient and helped as we went into bigger towns and denser areas with higher volumes. I really believe it made us able to weather downturns or issues like the pandemic or the recession of 2008.
“Our biggest strength is coming from Iowa where we built our concept”
President and founder: Rodney Anderson
Address: 2475 Coral Ct. # B, Coralville
Phone: (319) 318-6800
The queso cheese dip gets a lot of credit, too.
“I think we have the best queso in the industry,” said Anderson. “I feel a bit funny saying that, but we absolutely hear that from customers.” The popular menu item — which they sell more of than tacos — was added to the menu around 2006 or 2007, Anderson recalled. “We tested out everyone’s queso and we came up with a specific strategy. We hit it right almost right away with the amount of flavor and spices and the creaminess. And we haven’t tweaked it since. We’re afraid to touch what works.”
Hand-pressed tortillas as the wow factor
While the queso recipe remains, some things have changed for the restaurant over the years, Anderson recalled.
They didn’t start hand-pressing tortillas until a few years into the business.
“We do that right in front of the customer, which is our wow factor,” Anderson said.
“And it just makes for a great tortilla which makes for a great burrito that wraps well and holds it all together. It’s also a great base for a quesadilla.”
The introduction in 2014 of “Bob the Tool,” for mixing the ingredients, was huge win, Anderson said.
The company website notes, “With Bob's help, we've torn down the walls that once stood between meat and rice, between beans and salsa. Ingredients can now co-conspire as one ... .”
Anderson said the hand tool — used in spoon or comb-like motion — turned from a concept they tinkered with to becoming Anderson sees as a differentiating factor.
“Not all burritos are the same. We like that you get all those flavors in one bite with a Pancheros burrito. It makes a difference, and people talk about it.”
Challenges and innovations
Having been in business for three decades, Pancheros has faced its fair share of challenges.
“We've been through the Great Recession, which was a difficult time for new restaurants and franchising and growing and even getting any real estate leases done,” Anderson said.
He noted the significance of how the company and franchise locations weathered the pandemic.
“In March of 2020, I couldn't have told you what was going to happen, and I'm very happy with how things turned out. It hasn’t been easy, and every few months it seems to be a new challenge, but we've come through it all.”
They had been working hard on mobile and digital sales expansion even pre-pandemic.
“We had no idea what was going to happen to the restaurant business,” Anderson said. “I didn't know how long it would last and we didn't know if anybody could come in.
“We had stores out east where they were only doing curbside. We had stores in South Dakota and North Dakota where there were no cases of anything, and they were just operating as normal. We had to be ready for mobile pickup and delivery, so we threw everything we had behind promoting that.”
Anderson said within a couple months the chain was able to drive sales via online methods and keep sales growing.
Anderson said Pancheros is closing in on $100 million dollars in annual sales within the next two months.
“It’s a true celebration of hitting 30 years,” he said.
Anderson noted the chain soon will add drive-through windows in two locations — Bismarck, N.D., and Moline, Ill.-- and will consider incorporating them at other venues down the road.
“It’s been our big innovation for the last couple years to focus on that,” he said.