Pizza Chain Accepting Pesos for Pizza

A Texas-based pizza chain that has many of its stores in Latino neighborhoods announced Monday that it would temporarily allow its customers to pay for its pizza with Mexican pesos at all its stores.

Pizza Patron, which operates 59 stores, is offering its customers the added convenience of paying in both U.S. and Mexican currency. The company says it is giving its patrons the option so that it can compete more with major pizza chains.

"This program has everything to do with selling pizzas and putting ourselves in a more competitive position with the major chains out there that we compete with," Antonio Swad, president of Pizza Patrón Inc., told ABC NEWS.

Not About Immigration, All About Business

Pizza Patron (aka Pizza Boss) operates in five states: Texas, Arizona, California, Nevada and Colorado. It already provides its customers with menus both in English and Spanish and requires its employees at the counter to speak both languages.

About 60 percent of its customers are Latino. Pizza Patron restaurants will post the peso exchange rates at cash registers and will only accept paper currency and make all change with U.S. currency.

The chain started the peso program Jan. 6 at its Dallas stores and says it was well received by its core customers. Swad admits the feedback to the program wasn't all positive.

"We did have some reaction over the weekend through the Web site that isn't that favorable and to be honest, really isn't that nice," he said.

Swad said he received e-mails accusing the company of giving power to illegal immigrants.

"What people are attempting to do is link this program to the immigration issues that this county is struggling with. This doesn't really have anything to do with that," he said.

A Growing Trend?

Economists say it's not unique for U.S. businesses to deal with foreign currency. However, these companies usually do it on a small scale and are located within close proximity to a border.

Michael Davis, professor at the Southern Methodist University Cox School of Business in Dallas, says Pizza Patron's program may have more to with smart marketing than true customer convenience.

"Hispanics and Hispanic-Americans are in becoming an increasingly important force and this is a very good way of reinforcing that," Davis said. "It's terribly important as these people move up the economic ladder and become more and more integrated into the local economy. The fact that firms cater to them is just part of that trend."

Pizza Patron only plans to accept pesos through February but could make the program permanent depending on its success. Still, some critics don't see other businesses following Pizza Patron's lead. Davis says the currency trend may be actually tipping in the other direction.

"More and more Mexican businesses are accepting [U.S.] dollars. Because remember the flow funds is from North to South not South to North." he said.

Pizza Patron first opened its doors 22 years ago in a working class Dallas neighborhood. Today, there are five company-owned stores and 54 franchised locations with plans to open 6 new stores by the end of January 2007.

Pizza Patron's president admits the key dynamic to his company growth hasn't been just about pepperoni and mozzarella. Swad says it's his company's ability to target a specific customer.

"Our core customer is the Hispanic working family," he said. "When a family that is a hard working family can have pizza as part of their weekly routine, that's a victory for us. And that's what makes Pizza Patron different."