MapMuse - Locate Taco Cabana Mexican Patio Cafes Near You

...of the chain's history all locations were painted in the company's signature pink, some of which is retained in the new architectural concept developed in part by Stephen Clark, who became president of the company in 1995.

History

Taco Cabana, which was founded by Mike and Felix Stehling in 1978, opened its first restaurant at the corner of San Pedro and Hildebrand Avenues in San Antonio, Texas . The original location evolved out of a need for the Stehling's to add parking for their popular bar, the Chrystal Pistol. The brothers purchased the vacant Dairy Queen located across the street from the bar, but ultimately recognized the site was a potential business opportunity. Rather than tear down the building for additional parking they decided to open a taco stand. The open air design of the existing structure led to the "patio cafe" concept that defined the chains subsequent locations. Additionally, after having all of the patio furniture stolen after closing for the first night of business, the around-the-clock service concept began.

The restaurant, which focuses on fresh foods rather than pre-packaged, pre-prepared foods and serves beer and margaritas, quickly became a successful venture. The Stehlings soon developed the restaurant concept and by 1985 expanded it into a chain of six restaurants in San Antonio area.

In 1984, the Stehling brothers were approached by Houston restaurant developer Marno McDermot about taking the Taco Cabana concept nationwide. The brothers rejected McDermot's offer and by 1986 with Felix wanting to take the chain and expanding it and Mike wanting to maintain a smaller enterprise, the brothers decided to part ways. The restaurants were split with Felix maintaining five locations and the Taco Cabana name and Mike keeping four locations renamed TaCasita.

During that same period Marno McDermot did not drop the idea for a nationwide patio-dining concept and in association with business associate, Thom Dietrich, developed his own operation and incorporated Two Pesos in 1985. The company would open its first two restaurants in Houston later that year and hire a former Taco Cabana manager to run one of its stores. Two Pesos quickly expanded to 19 locations in eighteen months. By 1988 the company continued its rapid expansion and had opened locations throughout the southwest and in such far flung cities like Atlanta, Denver, Norfolk and Minneapolis.

In January 1987 Taco Cabana International filed suit against Two Pesos for allegedly duplicating Taco Cabana’s “Trade dress” and for theft of trade secrets (see Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992)' section below). Two Pesos lost the case and appealed the ruling all the way to the Supreme Court, who in June 1992 upheld the two lower court rulings in favor of Taco Cabana.

The company went public that same year and again filed suit against Two Pesos alleging that they had not significantly altered their restaurants as was mandated in the previous court ruling.

In January 1993 Taco Cabana announced that it was purchasing cash strapped Two Pesos' restaurant assets in exchange for 940,000 shares of Taco Cabana stock, approximately valued at $22 million. The sale included all 38 company-owned restaurants as well as all 51 franchised or licensed restaurants, operating under the Two Pesos and Shortstop Hamburgers names. Taco Cabana converted most Two Pesos locations into Taco Cabana restaurants, closed others and sold the Shortstop Hamburger chain.

In 2001 the company was delisted when it became a privately held, wholly owned subsidiary of Carrols Corporation.