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Chronic Cachet

It wasn’t that long ago that Daniel Biello and Randall Wyner would cruise Newport Beach in search of authentic Mexican food.

The friends grew up in Orange and spent a good chunk of their years eating tacos, burritos and enchiladas at hole-in-the-wall taco shops in nearby Santa Ana.

But they couldn’t find the same kind of home-style tacos and tamales in Newport.

That’s why they started Chronic Taco Enterprises in 2001.

The Costa Mesa-based company generates more than $11 million in yearly sales running the Chronic Tacos and Chronic Cantina restaurant and bar chains and an apparel company called Chronic Industries.

Chronic Taco Enterprises owns six Chronic Tacos restaurants in Newport Beach, Huntington Beach and elsewhere in Orange County.

It also counts 26 franchised locations in California and Arizona.

Chronic Tacos competes with Santa Ana-based Wahoo’s Inc. in terms of ambiance and Denver’s Chipotle Mexican Grill Inc. when it comes to food.

Chronic Tacos restaurants span 1,000 square feet to 2,500 square feet and have skate and surf stickers plastered on their windows and walls much like Wahoo’s Fish Taco restaurants.

“We look up to Wahoo’s,” Biello said.

Chronic Tacos restaurants make all of their food on-site. Local vendors deliver fresh produce, meat and handmade tortillas daily since the restaurants opt not to use freezers.

Its menu consists of everything from beer battered fish tacos and carne asada to enchiladas and tortas for less than $8. The restaurants serve beer, wine and horchata, a popular Mexican beverage made with rice.

The company’s Chronic Cantina is a different animal.

The bars, which are in Costa Mesa’s Triangle Square and Upland, offer a full bar, Mexican food, live music and dancing.

Chronic Taco Enterprises counts 250 employees at its restaurants and bars including 12 workers at its corporate office.

Headquarters

The company’s headquarters isn’t your run-of-the-mill type, but neither are its owners.

Chronic Taco Enterprises operates out of a nondescript 6,000-square-foot building on Superior Avenue near 17th Street.

The front of the building,where Chronic Tacos operates,has the typical computer-laden desks and casual corporate feel. In the back there is a small garage that houses Chronic Industries’ apparel business.

Wyner started Chronic Industries in 2001 with $2,000 worth of screen-printing equipment.

The company now prints hats and shirts for bands and companies such as Costa Mesa-based Volcom Inc. and Billabong USA in Irvine.

The company’s headquarters also has two small recording studios where musicians such as John Maurer, formerly of punk band Social Distortion, play.

Wyner and Biello are laid back when it comes to office dress codes.

Employees wear jeans, T-shirts and hats to work and some, including Wyner, are splashed with colorful tattoos.

“We’re not your typical white-collar company,” Biello said.

Casual garb and rock music aside Chronic Taco Enterprises gets things done, Biello insisted.

When Biello and Wyner decided to start Chronic Tacos, they envisioned their restaurants offering the same kind of home-style Mexican food popular at greasy-spoon taco shops, but in a hip and modern setting.

The partners tapped the Bonilla family, which owns and operates El Toro meat market in Santa Ana.

“The Bonilla family has passed down its recipes from generation to generation,” Wyner said. “It doesn’t get more authentic than that.”

Biello and Wyner studied the Bonillas’ recipes and practiced them over and over again. They spent months learning how to slow cook rice and beans, caramelize grilled meat, fry tortilla chips and roast chili peppers at different temperatures to enhance their spiciness and natural sugars.

Learning how to make a mean plate of carne asada or fish tacos wasn’t easy, but then opening a restaurant was no walk in the park either, Biello said.

The partners had to learn about city permits, health codes and building a restaurant according to the health department’s specifications, Wyner said.

It took them about a year to open their first 800-square-foot Chronic Tacos restaurant in Newport Beach in 2002.

Biello and Wyner, who were in their early 20s at the time, did the cooking and serving in their restaurant on a daily basis.

It soon became a local favorite among Newport Beach surfers, skateboarders and partygoers with late-night munchies.

Around that time, Chronic Industries started to grow with its own line of screen-printed T-shirts and print jobs for other clothing companies.

In 2004, Chronic Industries inked a licensing deal with Burbank-based Walt Disney Co. to design and sell hats.

Biello and Wyner opened their second Chronic Tacos in Huntington Beach in 2005.

Their first franchised restaurant opened in San Clemente a year later.

Bar Business

Riding that success, Wyner and Biello took a stab at the bar business and opened Chronic Cantina with nightclub industry veteran Keith Scheinberg in 2006.

They took a big gamble by opening Chronic Cantina at Newport Beach-based Greenlaw Partners’ Triangle Square shopping center, which has been plagued with vacancies over the years.

“Everyone thought we were crazy,” Biello said. “My family and friends told me not to open there. No one thought we’d stay in business.”

Today, Chronic Cantina is among the few businesses that anchor Triangle Square.

Chronic Cantina along with neighbors Sutra Lounge and Yard House have kept Triangle Square in business by making it a destination for dinner and dancing.

The bar business for Chronic Taco Enterprises is profitable primarily because the profits on alcohol are higher than what you would make from selling food, according to Scheinberg, chief executive of Chronic Cantina.

The duo even took the Chronic Cantina idea out of OC and opened a second bar and grill location in Upland.

Chronic Cantina locations aren’t cheap businesses to start, Scheinberg said. The company has to spend about $500,000 to $1 million to get a single location set up, he said.

“We usually have to bring in individual investors to get them set up,” Scheinberg said.

A single Chronic Cantina location generates more than $4 million in yearly sales compared to the $1 million in revenue each of the company’s Chronic Tacos restaurants generates, Biello said.

Chronic Cantina may be a big money maker but the taco business is still the company’s bread and butter,or, more appropriate, chips and salsa.

Biello and Wyner want to open more company-owned and franchised Chronic Tacos locations this year and next year, they said.

The company typically spends $250,000 to $450,000 to open a restaurant, Biello said.

That is when everything goes smoothly. When politics get in the way, it is a different story.

Such was the case when Chronic Tacos wanted to open a restaurant in downtown Fullerton.

The city recently passed an ordinance to quell the rowdiness found in its downtown by placing stricter rules on businesses that serve alcohol.

Some Fullerton residents worried that Chronic Tacos’ association with its Chronic Cantina bars would encourage more drunken behavior in the area.

“We faced some opposition at first but people realized that we were opening a restaurant not a bar,” Biello said.

The restaurant, which is in planned The Grind food court off Harbor Boulevard and Chapman Avenue, is set to open this year.

Security costs for the company’s Chronic Cantina locations are high, Scheinberg said.

The company has to spend about $30,000 a month on private security to make sure its bars are operating responsibly and safely, he said.

“It’s a huge expense but it’s necessary,” Scheinberg said.

A slow economy with more customers strapped for cash has hurt the restaurant business, Wyner said.

Chronic Tacos is trying to drum up more business these days by offering value items, while Chronic Cantina is offering happy hour specials on food and drinks, he said.

“We have to offer value. That’s what customers want right now,” Wyner said.

Wyner and Biello get a lot of buyout offers from restaurant companies and private equity firms for their Chronic Tacos business but the partners aren’t interested, they said.

“We like running this business,” Biello said. “I don’t think we’re ready to give up now.”

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