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$1.50 VOL. 38 NO. 28 JULY 13-19, 2015

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ORANGE COUNTY BUSINESS JOURNAL

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Stem Cell Treatment Developer Shifts From People to Animals

HEALTHCARE: Sees quicker pathto market with furry subjects

INSIDE

Mood for Moneypage 62

page 15

ocbj.com

�Taco Bell 74Expansion For Vans?

page 67

�Ready at Dawn 72

Game Developer ‘Geeked’Over Deal to Supply OculusMEDIA: Ready at Dawn takes aimat virtual reality, proprietary IP

�VetCell 9

By CHRIS CASACCHIA

Taco Bell Corp. builds more than just burri-tos.The Irvine-based fast-food chain is a proving

ground for restaurant industry executives, turn-ing out senior leaders of several Orange County-based chains, ranging from a publicly tradedchicken specialist to a fast-growing purveyor ofbuild-your-own pizzas.Among them:� Steve Sather, president and chief executive

of Costa Mesa-based El Pollo Loco HoldingsInc.;

By PAUL HUGHES

How Chain Serves Up Talent to Southern California Restaurant Sector

Irvine HQ: about 25% of staff of more than 600 promoted in past year or so

� Stephanie Lambrecht, vice president of op-erations at Rancho Santa Margarita-based Pieol-ogy Pizzeria; and

� Dave Barrows, president of Anaheim-basedBruxie Gourmet Waffle Sandwiches LLC.They cut their corporate teeth at Taco Bell, and

some also did stints at its parent company, YumBrands Inc. in Louisville, Ky. Others werealums of Purchase, N.Y.-based PepsiCo Inc. be-fore it spun off the restaurant chains Taco Bell,Pizza Hut and KFC—all of which now make uppublicly traded Yum.“PepsiCo always emphasized giving people

Irvine-based game devel-oper Ready at Dawn couldget a jump-start on its push tolaunch its own titles and con-trol content, thanks to its re-cently struck agreement todevelop video games for thehighly anticipated virtual re-ality headset from OculusVR Inc.“We’re very much desirous

of owning and building ourIP,” said Paul Sams, who be-came chief executive ofReady at Dawn this year after 20 years at BlizzardEntertainment Inc., which also in Irvine. “We’rein the process of trying to figure out what the com-pany’s next steps are.”One possible step is seeking strategic invest-

ments as it weighs funding options, according toSams.The immediate focus is on designing content for

Sams at BlizzCon:joined fellow Blizzardvets at smaller com-petitor

A Santa Ana-based stem cell company ischanging its therapeutic direction from man toman’s best friend.

PrimeGen Biotech LLC established VetCellTherapeutics in late June to develop and com-mercialize stem cell treatments to be used in vet-erinary medicine.VetCell is looking at treatments for dogs, cats

and horses. It’s targeting diseases such as lame-ness in horses, degenerative joint disease, muscle

By VITA REED

degeneration, tendonitis,and chronic kidney diseasein cats.It is developing therapies

by gathering stem cells fromanimal tissue samples,whether the animal’s own ora donor’s, and injectingthem into the animal undertreatment.“VetCell is recently

formed to translate our tech-nology knowledge toward

the veterinary stem cell opportunities. We haveadvanced technology that we would like to sub-

Yuen: wants to sub-mit “advanced”technology for trials

Two buildings in Aliso Viejo that hold the localoperations of homebuilder Lennar Corp. and othertenants has traded hands in what looks to be thepriciest office sale in South Orange County so farthis year.An affiliate of Invesco Advisers Inc., a Dallas-

based institutional investor, recently completed thepurchase of 15 and 25 Enterprise, a pair of five-story offices built about 14 years ago at the SummitOffice Campus in Aliso Viejo.

Aliso Viejo OfficeSale Estimated Over $100MREAL ESTATE: Two buildings atSummit combine for 295,000 SF

�Summit 67

By MARK MUELLER

25 Enterprise: center for much of homebuilderLennar’s day-to-day operations

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74 ORANGE COUNTY BUSINESS JOURNAL Local breaking news: www.ocbj.com JULY 13, 2015

� from page 1Taco Bellbig opportunities to grow and develop,” saidFrank Tucker, Taco Bell’s global chief peo-ple officer. “We have continued that tradi-tion.”“People earned their stripes at a Pepsi com-pany—they were willing to let you take risksas long as the performance was there,” saidEl Pollo Loco’s Sather, who was named aBusinessperson of the Year by the BusinessJournal in January based on his own successat El Pollo Loco.Taco Bell’s $8.2 billion in sales and 6,200locations make it the biggest OC-basedrestaurant chain. Professional and executivedevelopment extends Taco Bell’s influence tooperators here and in other parts of SouthernCalifornia (see sidebar, page 74).

Sather’s PathSather held several roles over six years atTaco Bell before he left the chain in 1992.He and colleagues viewed it as a sort of ex-ecutive prep school.“We were going to be there for a few yearsand move on, [often] to a bigger title at asmaller company,” he said.Sather went on to Irvine-based La Salsa

Fresh Mexican Grill and a Krispy Kremefranchisee before joining El Pollo Loco assenior vice president of operations in 2006.He became chief executive in 2010.He cited his years at Yum as time spentwith “sharp and forward-thinking people” de-veloping now-common industry practicesthat include the “value menu” and locatingsites in nontraditional venues such as airports.

“You knew you weregetting great training atTaco Bell,” Sather said. He said the work wasdemanding—“they did-n’t keep nonperformersaround; you eitherflourished or you did-n’t”—and the rewardsmatched the effort.“Taco Bell and Pepsiexecutives were alwaysin high demand,” hesaid.Sather has broughtformer Yum and Taco

Bell alumni to El Pollo Loco: � Chief Operating Officer Kay Bogeajisworked at Taco Bell and for PepsiCo’s Frito-Lay division.

� Chief Financial Officer LauranceRoberts held similar roles at KFC and aPizza Hut joint venture in the U.K.

�Vice President of Development Jeff Lit-tle found sites and built restaurants with TacoBell and Yum for 12 years before joining ElPollo Loco.“I wasn’t an expert in [those areas], but Iknew the type of training they had,” Sathersaid.

PizzaPieology’s Lambrecht worked for TacoBell for six years—she considers Bogeajis amentor from their time there. She arrivedthere after 20 years with sister chain PizzaHut, which had been her first job out of highschool.Yum “had a structured development plan,”she said. “People [move] among the brandsfor what they need.”Much of her work at Taco Bell was in op-erations, but for one three-year period shemoved over to a slot helping franchisees. Thecorporate post called for her to serve as a li-aison to 100 franchises. She also oversaw 30company-owned stores, all “test restaurants”where new concepts get tryouts.The experience has helped at Pieology,

which she joined in September as vice pres-ident of operations after a three-year tour ina similar role with Santa Monica-based theVeggie Grill Inc.“When I got [to Pieology], we had 23restaurants; now we have 57,” with 80% oflocations franchised, she said. Chicago-based restaurant industry re-searcher Technomic Inc. estimated Pieol-ogy’s 2014 sales at $44 million. “We have to build infrastructure,” to sup-port that, and, “I haveto support franchisees,their training and oper-ations, and do it forour company stores, aswell.”

Mas MarketingHelen Lao Baxter,owner of Irvine-basedrestaurant executivesearch firmClearPath SolutionsInc., helped bringLambrecht to Pieol-ogy. The Taco Bell experience helped makethe match.“Taco Bell … is recognized as a brandthat produces strong leaders,” Baxter said.“Their talent is coveted, [and] their execu-tives are known for building and sustaininga strong culture across brands.”Baxter said Taco Bell’s marketing is aparticular strength, including newer areaslike mobile, digital and social media.Dave Barrows was named Bruxie’s firstpresident in January.He worked in strategic, regional and na-tional marketing for Taco Bell in the early1990s.“I got the full circle of what goes intomaking a brand move,” he said. “They cre-ated a strong culture of strategy, recruited alot of very strong, strategic marketing peo-ple into it, [and trained those] people excep-tionally well.”Much of the marketing emphasis stemsfrom Taco Bell’s time as a unit of PepsiCo,which also owns Plano, Texas-based Frito-Lay.Barrows and Bogeajis each said a “pack-aged goods” mentality brought over fromselling soda and salty snacks was starting tobe applied to fast-food marketing.

Karen Eadon, a former vice president ofmarketing for Taco Bell who is presidentand chief operating officer of Riverside-based Farmer Boys Food Inc., agreed.“The discipline you get in consumer pack-

aged goods is incredibly good,” Eadon said.The marketing focus applies internally,too: top Taco Bell and Yum executives firstmarketed the food they sell.

�Yum Chief Executive Greg Creed, whoheld the same role at Taco Bell, was thechain’s chief marketing officer—“ThinkOutside the Bun”—and then led its overallbrand strategy worldwide.

� Taco Bell Chief Executive Brian Niccolcame from Pizza Hutto be chief marketingofficer before beingpromoted to president,and then to chief exec-utive in January.

� Taco Bell Foun-dation DirectorHamilton Brown,named to the post inJanuary, began byheading up TacoBell’s beverage mar-keting efforts.“We give people achance to do bigwork,” said Tucker, the chain’s human re-sources chief.

Corporate LadderTaco Bell has about 650 workers at itsheadquarters, and “about 25%” of them re-ceived a promotion in the last year or so, ac-cording to the company. The trend was reflected in the field, ac-cording to a spokesperson, with 750 workersmoving to “salaried management” slots atcompany-owned restaurants over the sameperiod.Headquarters has had an “employee in-volvement team” for about a dozen years,

made up of employees across departments, to“be the employee-sounding board for issues… helping boost morale in the building whenneeded,” the spokesperson said. Barrows said the human resources depart-ment at Taco Bell played a bigger role therethan any company he’d ever been at.“It was pretty well-orchestrated, and itwasn’t taken for granted you were able to doall these things,” he said.Now he and other Taco Bell graduates re-cruit executives who have gotten similartraining.Sather built his team from ex-Taco Bellemployees and fondly calls the extendedlinks among the chain’s former executives “agreat [group] to be in, where people still talkto each other years later.” Bogeajis—Sather’s chief operating officerat El Pollo Loco—said she seeks applicantsfrom PepsiCo or Yum.“I look at those resumes,” she said.“There’s no doubt about it.”So do newcomers with big ambitions.Irvine-based American Restaurant Hold-

ings Inc. owns three chains—Fresca’s Mex-ican Grill in Costa Mesa; JoJo’s PizzaKitchen in Chino Hills; and Muscle MakerGrill in Colonia, N.J.—with a combined 70units and about $40 million in systemwidesales. American Restaurant Chief Executive Tim

Betts has said he wants to “grow the brands”by building an internal structure and fran-chising programs. Last month he hired Joe Jaeger—a distri-bution, marketing and franchising veteran ofTaco Bell and PepsiCo—to lead West Coastfranchising for Muscle Maker Grill, whichhas about two-thirds of its locations in NewYork and New Jersey. �

El Pollo Loco bossSather: old employerwas “willing to letyou take risks as longas the performancewas there”

Taco Bell HR chiefTucker: “we give peo-ple a chance to dobig work”

Bruxie’s Barrows:“got the full circle ofwhat goes into mak-ing a brand move”during Taco Bell stint

Former Taco Bell executives have movedup in Southern California and beyond:

� Jim Mizes, president and chief operat-ing officer of Pasadena-based Blaze PizzaLLC, was a regional and operations vicepresident for Taco Bell and its then-parentcompany, PepsiCo Inc.

� Karen Eadon, president and chief op-erating officer of Riverside-based FarmerBoys Food Inc., and a former El Pollo LocoHoldings Inc. chief marketing officer, wasa marketing vice president at Taco Bell anda brand manager for PepsiCo’s Frito-Lay di-vision.

� Steve Carley, chief executive of Green-wood Village, Colo.-based Red RobinGourmet Burgers Inc. and former chief ex-ecutive of El Pollo Loco, was vice presidentover, at various times, operations, market-ing, and development at Taco Bell, andworked in the Middle East for PepsiCo.

� Michael Shumsky, chief executive ofDallas-based French-themed café chain LaMadeleine de Corps Inc. and former chiefexecutive of Aliso-Viejo-based JohnnyRockets Restaurant Group Inc., was asenior vice president with Taco Bell andPepsiCo. �

Tacos for All

Taco Bell: 6,200 locations, $8.2 billion is sales, biggest OC-based restaurant chain

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