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Texas’ New Competition
Mexican franchises fleeing escalating drug violence enter new market across the border.
Border Fence separating El Paso, Texas and Juarez, Mexico.

With much of the world focused on economic indicators, Juárez, Mexico, is experiencing trends of a grislier sort: Decapitations, arson, and homicide are all part of daily life in one of the world’s most dangerous cities.

Juárez’s drug war, which has claimed more than 1,000 lives in 2009, has ravaged the restaurant industry and sent franchises north into El Paso, Texas, to escape violence and extortion.

“There’s crazy people burning restaurants over there and they try to get money from the restaurants and bars,” says Antonio Rodriguez, general manager of one of the two Barrigas Restaurant locations in El Paso. Arson is a common punishment in Juárez if a restaurant refuses protection from drug cartels. As a result, Rodriguez sold his house and moved his family to El Paso in search of security.

Setting up shop north of the border involves a complicated visa process. But many Mexican restaurant operators have jumped through the legal hoops to establish themselves in a peaceful and potentially lucrative business environment.

“The restaurant business in Juárez is pretty bad right now, so they come to a city with no restrictions … and they are making a killing,” says El Paso–realtor Juan Uribe, who has helped more than 10 Mexican restaurateurs open locations in the last three years.

Economic promise compels restaurants to uproot as much as the daily threats of the drug war. Uribe says a single El Paso franchise can make more money than multiple Juárez locations combined. He cited Burritos Crisostomos, which has five Juárez locations and recently opened a franchise in El Paso to favorable reviews, as an example of a success story.

“There’s a business opportunity for these people,” he says. “The motivation for them is making more money.”

El Paso has been insulated from the recession due in large part to the bloodshed across the Rio Grande. In fact, by all accounts business in the city of more than 740,000 residents is booming as affluent Mexicans flee Juárez in large numbers.

“You see places opening every month,” says restaurant-owner Omar Herrera, a partner of the El Paso-based Grupo Root. “Not only restaurants—clothing stores, apartment complexes—because a lot of people with money from Juárez just left.”

In January, Herrera had to close the high-end Juárez eatery Maria Chuchena when El Pasoans, fearing for their safety, stopped coming.

“The people from El Paso were keeping the [restaurant] alive,” says Herrera, who estimates that 40 to 45 percent of restaurants in Juárez have closed down since the most-recent violence began.

But Herrera and his Grupo Root partners—his mother and two brothers—decided that if El Paso would not come to Juárez, they would bring Juárez to El Paso. Two months ago they opened El Rehilete Mesón Mexicano on the city’s east side. They plan to open a new Maria Chuchena in El Paso in the fall.

El Rehilete routinely has 45-minute waits on the weekend and hosts events “every single day” of the week, Herrera says. He credits the restaurant’s authentic Mexican food for the fast start.

“It’s a pretty common tale in El Paso to say you sell Mexican food because you’re right across the border—but no one really does,” he says. “They sell Tex Mex. It’s a watered-down Mexican.”

In a city saturated with about 4,000 restaurants, the competition from bona fide Mexican eateries like El Rehilete could spell trouble for homegrown establishments.

“It’s tough competition for the locals,” says Uribe, who called El Paso “the Mexican food capital of the country.” The restaurant operators from Juárez are efficient and experienced, he says. “They know how to run restaurants.”

Leo Duran Sr., whose family has owned the L & J Café in El Paso for 82 years, took note of his new competitors. But he’s taking it in stride.

“I’m sure you’ll have some people checking out the novelty of the [new] establishments, but we have five- and six-generation customers that have been established over the years,” says Duran, who sits on the Texas Restaurant Association’s board of directors.

Still, he acknowledges El Paso’s changing restaurant landscape.

“Do I worry about tomorrow,” he asks. “Yes, of course I do.”

photo courtesy: ©istockphoto.com