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Originally published November 10, 2007 at 12:00 AM | Page modified November 10, 2007 at 2:01 AM

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Taco Del Mar's president steps down

David Huether, the man who ran Taco Del Mar's daily operations for almost three years, has stepped down as president and chief operating...

Seattle Times business reporter

David Huether, the man who ran Taco Del Mar's daily operations for almost three years, has stepped down as president and chief operating officer of the Seattle fast-food chain.

The company just completed its most profitable fiscal year, although it is privately owned and does not disclose profit. It has 265 stores in the U.S. and Canada and expects to add about 100 more during the next year.

However, its franchisees are battling rising food costs and lower sales, problems that could burn headquarters if they aren't fixed.

Taco Del Mar added nearly 90 stores during the past year, but it closed 35, the most ever in a single year. Co-founder and Chief Executive James Schmidt, who will now take the additional title of president, blames higher food costs and lower sales, and said some stores suffered from underlying problems like bad locations.

Last spring, Taco Del Mar tried to counteract rising costs by recommending that franchisees raise the price for their signature Mondo Burritos by 50 cents to $5.49.

The plan backfired, sending sales down and hurting franchisees, Schmidt said.

Now the company wants stores to lower burrito prices to $4.99 and even $3.99 in some markets. Smaller burritos will drop from $4.49 to $2.99, and the headquarters office will help franchisees with cost-cutting ideas and marketing.

Huether will continue as a consultant and still owns a large portion of the company, Schmidt said.

Day-to-day operations and the COO title go to Kevin Hansen, who was vice president of franchise development and formerly owned a Seattle-area Taco Bell franchise.

"We need a different sort of leadership as the franchise organization becomes stronger. We need somebody who will work as a partner with franchisees, and Kevin fits that bill to a T," Schmidt said.

Huether began as a consultant for Taco Del Mar in the late 1990s, when it was flailing and unprofitable. He did not return phone calls Friday.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

Copyright © 2007 The Seattle Times Company

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