Seated at a corner table in his newly opened Mexican-style Cantina restaurant, Ken Pattenden, president of the Taco Time Canada franchise restaurant chain, pauses for a moment to ponder the possibilities and let his imagination run wild.

Gazing at a bare wall in his first Cantina franchise restaurant in Calgary’s Penny Lane Mall, the sprightly Pattenden is thinking outside the box – way outside.

It is still 25 minutes before Amigo Hour, but Pattenden is entertaining visions of a sun-splashed Mexican beach in land-locked Calgary as part of his business plan.

It’s quite a stretch for one who honed his business skills crunching numbers in his previous career in commercial real estate and auditing before investing in tacos a decade ago.

“I’m thinking of putting a projector in the ceiling and turning this wall into a big screen with a video of people walking on a beach,” gushes the man who had the audacity to test TacoTime hot sauces in the Mexican state of Tabasco for a radio commercial.

Larry MacDougal photos, Business Edge
TacoTime El Presidente Ken Pattenden doesn’t lose sleep over his U.S. rival.

For Pattenden, who co-owns Taco Time Canada and its 115 franchises with wife Aarol, it’s all part of an ambitious master plan to turn Taco Time Canada into Canada’s largest Mexican food restaurant chain. 1. What initiated your interest in purchasing the Taco Time Canada rights in 1993?

“Taco Time was started in Canada 25 years ago by my father-in-law, Jim Penny. He was a real veteran of the fast-food industry who started in the fast-food business in the 1950s. He had the third Dairy Queen in Canada and the first A&W in Alberta. Ten years ago, he was looking to get out of the food business. At the time, I was living in Vancouver, working in commercial real estate development and I was a landlord for a couple of TacoTime restaurants. Jim called me one night and asked me if I’d be interested in taking over Taco Time Canada. I actually had quite a chuckle over the whole thing, not to be rude with him but because it was so far away from any conversation we’d ever had.”

2. So why’d you even consider it?

“Well, my wife (Aarol) and I chatted about it and we felt there was a good opportunity for Mexican restaurants in Canada. We had a large retail (store) portfolio at the time in the company I was with, and there was nobody doing Mexican (food). We thought it was kind of a different type of thing, and you don’t get too many opportunities in your life to totally shift gears and go in another direction. It was a pretty drastic change, going from the boom-and-bust times of commercial real estate development to the nickel-and-dime restaurant business.”

3. What was that transition like?



“It was a very succinct transfer of responsibilities, which was good. I give Jim a lot of credit for being able to walk away from something he spent 15 years creating. It was great for me because there was never any confusion in the organization over who was driving the train. Coming into it, I had no background at all in restaurant operations so, out of necessity, I thought I’d better be more strategic in my approach . . .”

4. How has your strategy changed in building the TacoTime brand?

“We spent the first seven or eight years feeling like we had to be a part of the quick-service restaurant industry. It was really in the past year or two that we realized that our opportunity is far greater than that. Our opportunity is to be the Mexican restaurant, be it fast food, casual or full service. We set our sights on being the dominant Mexican restaurant chain in Canada (currently, it is second to Taco Bell in Canada). I like the idea of trying to instill within our franchise system the same kind of enthusiasm that I have about our food and helping them to kind of get out of the fast-food box and realize that they serve great Mexican food and they should consider themselves a Mexican restaurant.”

5. You recently opened your first Cantina-style franchise restaurant (in the former home of Schwartzie’s Bagels). What’s unique about the new Cantina restaurant compared to the TacoTime franchises?

“It’s still the same menu as TacoTime, but how we prepare the food is different. We present the food on plates and the customers can make special requests. The whole idea is based on trying to get some atmosphere into the store and make it look like a Mexican restaurant. We aren’t all the way there yet, but we’re getting pretty close. We’re also looking at having Mexican-style live entertainment.”

6. Are you planning a major expansion with the Cantinas?

“I’m looking at 30 in Western Canada over the next three years, at least half of those being in the Lower Mainland of Vancouver.”

7. What are the main advantages of the franchise business model?

“Franchising gives you the ultimate leverage and also gives you the ability to have a motivated individual owner/operator in the store, particularly with the Cantinas where you have other issues, such as dealing with liquor and having more mature staff. An owner/operator will have less difficulty than we would have if we were trying to open corporate stores.”

8. Where do you see your company in terms of growth five to 10 years down the road?

“I see us having a major presence in the Ontario market. Obviously, to be the dominant Mexican restaurant chain in Canada, we need to have a stronger presence in Ontario (currently, TacoTime extends only as far as Thunder Bay). The next big element of growth will be the development of the Cantinas as a third-unit type. That will allow us to expand our presence in markets we’re already in as well as entering new markets on a single-store basis. In Ontario, I want to go in on our terms, not somebody else’s terms. I want to go in knowing that ultimately we’ll have 50 to 100 stores there. That may mean finding another partner or developer for that market. For this year, we anticipate our growth to be in the three- to five-per-cent range (above 2002 revenue of about $45 million).”

9. Has the mad-cow beef scare impacted your business?

“No. Surprisingly, we’ve seen nothing on the consumer side and I think that’s typical of all restaurants.”

10. Do you lose sleep over what Taco Bell is doing?

“(Laughing) No, not at all. I imagine they might lose some sleep over what they’re doing. We’ve always felt that the quality of our food and our portions are better than theirs. I think their advantage, historically, has been in marketing spill out of the U.S. where there is spill advertising that they benefit from. I eat regularly at Taco Bell (for research purposes). The portion size for the taco (at Taco Bell) is about two-thirds of ours and we use real cheddar cheese while they use a processed cheese. These may be subtle points from the consumer side, but they’re important points from our side.”

11. Have you made more money in the restaurant business than in commercial real estate?

“That’d be a hard one to answer. I guess we’ve made more money at this one, but we’ve invested more of it back into our business. I used to have a 37-foot boat and I don’t have a 37-boat anymore. But that was also because a 37-foot boat in Calgary wouldn’t make a whole lot of sense.”

12. What was your boyhood dream?

“To play in the National Hockey League. I had a hockey scholarship to the University of Michigan (as a defenceman), but that was as far as I got with my dream.

“My knees decided to go before my dream could go anywhere. It happened at an opportune time, because I was able to shift gears and focus on getting a good business degree (Bachelor of Business Administration). I articled for my CA (chartered accountant designation) after that. It was difficult letting go of a game I’d played since I was six, but what’s important is I got an education that I wouldn’t have gotten with hockey.”

13. What was your first business venture?

“It was doing shoe shines in the hospital in Quesnel, much to the chagrin of my father, who happened to be on the board of directors of the hospital. I worked as a grocery boy when I was 13 and I worked in a steel fabrication mill until I was 16.”

14. As a former auditor with Arthur Andersen accounting firm, what’s your view of the way the Enron scandal destroyed that organization?

“That was really sad. From a professional standpoint, they had just exceptional standards, almost to a point where you felt restricted when you worked there. You couldn’t do as many new things because of the firm’s restrictions. I feel really sorry for the people who worked there, because I really do believe they were the subject of a witch hunt. There were obviously a few people whose careers should have been wrecked as a result of that, but not the whole system that affected thousands of people.”

15. From your perspective, what’s the most important value or principle for entrepreneurial success?

“Honesty. That’s particularly important in a franchise system. Now that I’ve been involved in that business model, I realize the strength of it as long as there’s honesty through the system with the franchisee and franchisor.”

16. Who’s the entrepreneur you most admire?

“I’d have to say Dave Thomas (the late founder and owner of the Wendy’s fast-food chain). This guy, much like my father-in-law, started off with a few stores and did things well at the store level. And it’s not easy to make that bridge of being a hands-on operator and then running a franchise system. And Dave Thomas did a wonderful job in that system. He made mistakes, he recognized the mistakes and learned from the mistakes. He did not give up. I met him four years ago at a cocktail party at the Canadian Franchise Association conference in Toronto. He was a very nice fellow. He made it on his own. There was not anything presumptuous or pretentious about Dave Thomas. He probably wasn’t much different at the end from when he started.”

17. Do you think you do some things that are similar to the style that made Thomas successful?

“I believe in the style of being friendly in the franchise system. I never knew Dave Thomas well enough to say he was a friendly fellow, but there certainly was a perception about Dave Thomas that this was a family thing. In a restaurant, I really believe that you do just about anything. When I come into this store at lunch time, I clean tables and wash floors because in a restaurant there are only jobs to be done, not positions to be filled. And that also gives me an opportunity to talk to customers and that’s where I do my best research. That whole idea that anybody should do anything, I think, is important and I think Dave Thomas emulated that.”

18. Like Dave Thomas, you do your own commercials, but why are you only on radio and not television?

“We did the radio commercials in Villa Hermosa, Mexico, where we set up a booth and asked Mexicans what they thought of our food. The producers took a lot of video as well and they were really giving me a bad time, saying we could also do some great TV commercials. I said: ‘No, I don’t think so.’ It’s not a medium that we can be strategic enough with yet. Maybe in three or four years, we can do it.”

19. What’s your best anecdote from the food-tasting booth in Mexico?

“We set up this booth at a university. I was pulling the hot sauces out of the cooler and I turned around to see a hundred people lined up and they didn’t even know why they were lined up because we hadn’t told them anything yet. The first person in line was a 19-year-old guy. Villa Hermosa is the capital of the state of Tabasco, so we were in the Yankee Stadium of hot sauces. Our green sauce is pretty hot. This kid took the taco chip and loaded it up with the green sauce and stuck it into his mouth with much bravado. His eyes almost popped out of his head. He starts grinning and says, ‘muy bueno!’ (very good). They loved our food. A professor from the university asked if we were going to franchise the business in Mexico because she wanted to open a store. But our business is building in Canada. Yet, the response from the Mexicans did more to charge me up about the quality of our food and what we’re doing than anything we’d done in 10 years.”

20. So, after real estate and tacos, what’s your next venture?

“This is it. This is it. I’ve got a lot more to build here. Community is very important to me. I’m taking over as president of the Calgary Children’s Cottage Society. That’s important to me. It’s also important to me to sit on the board of the Canadian Franchise Association. Family, of course, is most important. I’m blessed with two really healthy, fine children. Those things sort of round me out.”

IN PROFILE: Ken Pattenden
* Born/raised/age: Victoria, B.C.; B.C. Interior; 52.
* Title: President/co-owner, Taco Time Canada.
* Education: University of Michigan, Bachelor of Business Administration; Professional Chartered Accountant.
* Family: Wife Aarol, two children.
* Career: Pattenden became president of Taco Time Canada in 1993. Prior to that, he held various senior positions in commercial real estate and accounting. He was chief financial officer and partner with Schroeder Properties, vice-president of finance with BCE Development Properties, VP of operational controls with Cadillac Fairview, VP and controller with Daon Development Corporation and an audit manager with Arthur Andersen.
* Moonlighting: Pattenden is the Prairie Region chairman for the Canadian Franchise Association and a director of the Calgary Children’s Cottage.
* Passions: Golf, fly fishing.

THE COMPANY: Taco Time Canada
* Brass: Ken Pattenden, president; Brian Carnwath, vice-president, marketing; Steve Nickerson, director of operations.
* Profile: Taco Time Canada has the exclusive franchise rights to the TacoTime brand in Canada, operating 115 franchises through three principal units – food court units, drive-through and inline stores with 50 to 70 seats, and upscale Cantina restaurants, the first of which was recently opened in Calgary. Franchises span Vancouver Island to Thunder Bay, Ont. The first TacoTime was opened in Lethbridge in 1978.
* 2002 Revenue: Approx. $45 million.
* Website: www.tacotimecanada.com
* Contact Info: Phone/fax 403-543-3490 / 403-543-3499; address 200-7500 Macleod Trail S.E., Calgary, T2H OL9.