Diversified Restaurant Group franchisee of the year

On a bright, sunny evening in August, SG Ellison, CEO of franchisee organization Diversified Restaurant Group (DRG), walks into the company’s Taco Bell Cantina on the Las Vegas Strip, proud of what his team has built.

The restaurant is 9 years old, but it’s still unlike anything the Mexican giant has seen before. To this day, it is the highest-grossing store in Taco Bell’s system, earning around $8 million per year.

“It’s Willy Wonka,” says Ellison, as he points to colorful tubes filled with bubbles seemingly sprouting out of the restaurant’s digital menu boards toward the ceiling.

In true Las Vegas fashion, the upstairs doubles as a wedding chapel, where couples can get married with as little as four hours’ notice. The location—using an outside vendor to help gather officiants and a bouquet made from numerous sauce packets—hosts more than 200 weddings per year. The option to be joined in holy matrimony draws the most passionate fans, who in some cases appear in Taco Bell gear or dress up as a taco or burrito.

Even when no wedding is occurring, the 24/7 venue is the ultimate party vibe. A DJ booth is available for when the store wants to fill the air with loud, energetic music. Up above, there’s a large monitor with 16 TV screens for guests’ viewing pleasure. Like other Cantinas, the restaurant serves alcohol, which accounts for about 50 percent of sales in Las Vegas. Customers can walk up to the counter and see their beer automatically filled from the bottom up. Or they can order a Twisted Freeze, mixing a frozen drink with the alcohol of their choice, in a cup that’s a yard in length.

Diversified Restaurant Group’s Las Vegas Cantina is the highest-grossing store in Taco Bell’s system.

It’s a destination and a taste of the Las Vegas environment that’s drawn showgirls and the Las Vegas Raiders cheerleading team. It’s where customers hold their holiday parties and bachelorette festivities. People plan their vacation to the city around visiting the famed location.

DRG, which franchises roughly 360 Taco Bell and Arby’s units across Nevada, Northern California, Southern California, Alaska, and Kansas City and is QSR magazine’s 2025 Franchisee of the Year, is no stranger to pushing the envelope and transcending the typical idea of what a restaurant should be. The franchisee is not only responsible for the wondrous Las Vegas restaurant, but also eight other themed Cantinas, the introduction of beverage spinoff Live Más Café, digitally forward Go Mobile restaurants, AI ordering at the drive-thru, EV charging stations, and Arby’s only food truck.

That’s the type of culture Ellison wanted from the start.

“A lot of times we get conservative with wanting to spend money as operators and that’s rightfully so,” Ellison says. “… On occasion in areas where you think you can push, spending more money typically can result in better results, and that’s not just in assets, but that’s in people, that’s in technology.”

Development at the Core

DRG didn’t begin with born-and-bred restaurateurs.

The company’s origin dates back to 1992 when real estate guru and serial entrepreneur David Grieve started A&C Ventures, which invests in sale-leaseback deals. Over the years, he’s worked with companies like Payless, Rite-Aid, Men’s Wearhouse, and Eckerd. A&C eventually began keeping a lot of the properties instead of selling them off and started major ownership partnerships—friends, family, and associates that have become investors in not only the real estate company but also DRG. The real estate business is now a $1 billion portfolio with about 150 properties divided between apartments, retail, and some industrial.

“We’ve never gone out to look for money,” says Grieve, who serves as chairman of DRG. “Money has come to us through all of those partners. We’re kind of unique in the private-equity world in that we do our own private equity, and it’s all people that we know… In any given deal, our group will put up about one-third of the equity and raise the rest from our partners. It’s been an amazing model because they all get to share in our success in the restaurant business.”

In 2006, Grieve’s adventures in real estate led him to Ellison, who was representing CVS Pharmacy in a transaction in Albuquerque, New Mexico. Ellison, without any restaurant experience either, went to school for engineering before dipping into real estate and development.

“I sat down with SG at the airport, and we hit it off,” Grieve recalls. “I knew he was tough and I was tough, and we liked each other.”

Diversified Restaurant Group CEO SG Ellison and chairman David Grieve have known each other for about 20 years.

A few years later, after they had become friends, Grieve instructed Ellison that if he wasn’t going to come work for him, he needed to strike out on his own. Later down the line, Ellison formed First Street Development with Grieve and Panda Express cofounder Andrew Cherng as lead investment partners, proving his own entrepreneurial merit.

The first restaurant opportunity, in 2012, happened near the same time. Grieve and Ellison created a partnership to provide equity to former Taco Bell executives Brian Cox and Mark Reed to acquire 29 company-owned restaurants. The investment is also when the Doritos Locos Taco debuted, which brought hoards of customers back into Taco Bell restaurants.

“I ended up watching that deal over the first year, and said, boy this is an amazing business with Taco Bell. I think we could be really successful and make this thing much bigger,” Grieve says.

The former Taco Bell restaurateurs just wanted to keep their 29 stores. Meanwhile, Grieve foresaw the footprint turning into 300 stores, or even 500. So Grieve and Ellison bought themselves out of the deal, and looked to start their own partnership with Taco Bell.

The first acquisition happened in 2014 when DRG looked to Northern California and acquired 72 Taco Bell restaurants in the Bay Area and then 13 outlets in Napa and Sonoma. In 2015, it followed that up with 63 more Taco Bell units in Nevada. Across 2017 and 2018, the company moved east and purchased nearly 60 locations in the Kansas City market before returning to the West Coast in 2021 and adding 75 Taco Bells in Southern California—its largest acquisition to this day. DRG then purchased 25 outlets in San Diego in 2023.

“I just felt like the Taco Bell business is so unique and the brand is so cool and it’s just an iconic brand that has been relevant for years and years and years, and they do a great job of staying relevant, which is really exciting to me,” Grieve says. “So it was partly the people’s business. Obviously, the financial part of Taco Bell is incredible. It’s not an easy business to break into. They are very picky about who their franchisees are, and I think we proved ourselves by being a great partner when we partnered with the [former Taco Bell executives]. And [Taco Bell] welcomed us with open arms.”

In between those Taco Bell moves, DRG lived up to its “diversified” name by buying Arby’s restaurants in California, Nevada, and Alaska.

Innovation at its Finest 

The company paired its M&A moves with some of the most active innovation among any franchisee in the country.

Once DRG bought the Northern California restaurants, it searched for expansion sites. It found one at the bottom of a condominium building, which previously housed The Melt, a grilled cheese concept. It was across the street from Oracle Park, the home of MLB’s San Francisco Giants, and had favorable lease terms.

Ellison and the corporate leadership team collaboratively developed the “Cantina” identity, an elevated version of the typical Taco Bell store that also sold alcohol. This was the second-ever Taco Bell Cantina to open. The first was in Chicago, which debuted just prior to the San Francisco location.

The following year, when DRG bought Nevada, the first thing it wanted to do was bring a flagship Cantina to the Las Vegas Strip. The team was surprised that a Taco Bell wasn’t there already, but was told by the previous franchisee that it was too expensive to operate.

Ellison felt differently. Having built four CVS drugstores in the area and dealing with high rents and land prices, he knew the business was there to match it.

“Even though it feels really expensive as a percentage of total income, it was in line with anything else you would do in a suburban market,” Ellison says. “And CVS used to pay their rent on the Strip by just selling water and sunglasses. They sold so much water and sunglasses that everything else was just gravy.”

DRG knew that if it built the Las Vegas Cantina correctly, it would work. The company gave Taco Bell designers the example of the flagship M&M shop down the street, which has every type of flavor imaginable. It’s a destination for M&M connoisseurs, and DRG wanted the same for its Las Vegas restaurant.

“We wanted the drinks flowing from the sky and built all of these amazing features in the building, including the wedding chapel… It’s just been a wildly successful Taco Bell Cantina flagship, and it launched the idea of Cantina in a bigger way,” Ellison says. “Even though a couple had been opened, this one really took it to the next level.”

Now, DRG has nine Cantinas, each with its own personality.

The one in Downtown Los Angeles—which attracts a lot of walk-ins and delivery customers, but not as much alcohol—is inspired by music, with encased guitars displayed on a wall, and the city’s eclectic vibe, with a stained glass window showcasing a taco. It is less than a mile away from Crypto.com Arena, home of the NBA’s Los Angeles Lakers, WNBA’s Los Angeles Sparks, and NHL’s Los Angeles Kings.

There’s also the Taco Bell in Pacifica, California, that sits on stilts across from the beach. In 2019, DRG decided to transform the restaurant into a Cantina and what Ellison describes as an “elevated tiki bar” atmosphere. Recently, the company converted the fireplace into an indoor/outdoor bar. The location is on pace to earn around $8 million this year and challenge the Las Vegas Cantina as the highest grossing store in the system. It’s already the most searched Taco Bell in the world.

“I remember [Grieve] and I were standing on the deck and on the beach and said this is the place we should be able to have a taco and a Corona,” Ellison says. “…The brand worked with us. They helped us financially with some of the marketing things they could do because it was all risky because it hadn’t been done before.”

The Taco Bell Cantina in Pacifica, California, sits on a beach and showcases an ‘elevated tiki bar’ atmosphere.

The 10^th Cantina is planned for San Francisco. It will have a nautical theme and be an homage to the wharf industry.

In 2022, DRG once again proved its diverse nature by opening a digitally driven Go Mobile restaurant with two drive-thrus in Las Vegas—the first of its nature on the West Coast. One side is dedicated to delivery drivers and mobile pickup orders.

There were already a handful of Taco Bell restaurants in the trade area, but at the time, Ellison and his team saw an opportunity to offset some of the delivery rush being felt at nearby high-volume locations.

“[It] made for a better experience with the delivery drivers because there was always this challenge with delivery drivers at fast-food restaurants. Do I stop and get out of the car and go inside to the dining room, or do I get in the drive-thru stack and wait? And so we made it purposeful that here’s your own stack, here’s your own way to get through,” Ellison says.

In the same year, DRG became the first Taco Bell franchisee to open EV charging stations, a solar carport, and electric battery storage, at a unit in San Francisco. And more recently, the franchisee began testing automated voice ordering at the drive-thru for Taco Bell. The technology is active in 10 of DRG’s restaurants throughout different markets.

“I don’t think you can be afraid to fail if you are in innovation, and I think we’ve learned from that and now we’re much more confident when we approach tests or we think about things out of the box and when someone brings something to us,” says COO Todd Kelly. “I think our teams in the field are looking for, ‘Hey, what’s next?’ Instead of, ‘Oh my goodness, what are we doing now?’”

DRG’s innovation covers Arby’s as well. When the company first bought into the sandwich giant, Ellison and his team viewed it “as a recognizable brand with a differentiated format that we think has a lot of room for growth.” The issue was that customer trial wasn’t as high. DRG set out to fix that.

For example, in Las Vegas, DRG operates Arby’s only food truck, offering a full menu of roast beef, chicken, burgers, sides, beverages, and dessert. The 35-foot-long vehicle—decorated with an Arby’s poker chip, the phrase “Viva Las Arby’s,” and LED bulbs reminding customers of the Vegas nightlife—has its own website and is available for a variety of events, such as weddings, holiday parties, school lunches, and fundraisers.

The Arby’s food truck is based in Las Vegas.

In terms of product innovation, DRG was responsible for connecting Arby’s with actors Anthony Anderson and Cedric The Entertainer, who launched new lifestyle brand AC Barbeque. In the spring, the celebrities and the brand worked together to create the Quarter Pound Pulled Pork and Brisket BBQ sandwiches, which were available alongside Cedric’s Sweet Bussin Brown Sugar Sauce and Anthony’s Spicy Chipotle Smoke Sauce.

Jason Dunn, principal operator of Arby’s and senior VP of restaurant excellence, lists three priorities for Arby’s: bringing forth menu innovation, deploying new technology, and attracting a younger consumer. DRG tested a value-engineered prototype for the brand and is also piloting a new catering program on behalf of Arby’s—individual boxes with sandwiches, chips, and a cookie.

DRG’s impact cannot be denied. When the franchisee entered Alaska and added Arby’s units, it doubled the sales volume in the market, according to Ellison.

Blooming of a Beverage Business

Before Taco Bell’s new beverage spinoff—Live Más Café—came to life, Ellison thought through what a Mexican-inspired coffee brand would look like.

He spent a lot of time in Mexico City and Southern California learning about local Mexican cafes that had authentic beverages and used spices not often implemented in the states. Ellison’s Nana Rosa would put cinnamon and vanilla in her coffees and make different types of Mexican treats, and those memories resonated with him.

Ellison worked with David Zimmerman, his branding partner and friend, to come up with an innovative concept. It was more exploratory than anything else.

The idea was placed on the shelf, until Ellison chatted with Taco Bell CEO Sean Tresvant around the time of the Super Bowl in 2024. He asked Ellison how Taco Bell could break through on drinks and grow the platform.

“I shared with him some of my ideas from the year prior of what I’ve been working on,” Ellison says. “And it was his idea to say, ‘OK, well, why don’t we do that inside the four walls of Taco Bell? How can we take what you started with, but expand it into Taco Bell? Nobody does Mexican-inspired better than Taco Bell. You have a bunch of restaurants. It could be meaningful for the system and the brand. What would it take for you to see this idea through from a Taco Bell lens?’”

Taco Bell provided financial support for research and development and a small team that helped with product and operations—workers who were willing to take leaps and risks. Ellison was able to bring in Zimmerman for creative support as well.

Additionally, Ellison and Zimmerman worked closely with Liz Matthews, Taco Bell’s global chief food innovation officer, and Taco Bell U.S. CMO Taylor Montgomery to bring the beverage brand to life. Matthews and her culinary team created new products while Montgomery helped lay out the ethos of Taco Bell and how to weave the sub-brand together with the parent. Ellison calls it “being radically different, but authentically Taco Bell.”

The group landed on a brand that’s lighter in color (a purplish, lavender shade) and has softer tones to “bring a little different energy into the four walls,” Ellison says, particularly for the morning daypart.

Live Más Café sprinted toward the finish line. The idea really kicked into gear around late March 2024, and DRG began renovating a $3 million Taco Bell in Chula Vista, California, in September. Just a couple of months later, the brand opened within the Taco Bell restaurant.

“That’s the other part—you have to have a little crazy in you to do some of these things because you’re taking a really great restaurant that’s making money and you’re going to blow it up,” Ellison says.

The Live Mas Cafe has been a big hit in California.

The workers were soon labeled as “bellristas,” who offered differentiated drinks like chillers, agua frescas, specialty coffees, and dirty sodas, along with Taco Bell’s typical food menu.

Going forward, 30 additional Live Más Cafés will open. DRG will debut 15 in Southern California and Taco Bell corporate will open 15 in Texas.

The one exception is that a Live Más Café kiosk will be built across from the Taco Bell Cantina in Las Vegas.

“Having been able to experience Las Vegas and touch hundreds of thousands of visitors from all over the country and world, that’s a way to build brand equity rapidly,” says Ellison, on why he wants to bring the beverage brand to Las Vegas. “To the point where when they go back to their markets, Ohio or the Southeast, the Northeast or wherever, they’re like, ‘Oh, I was at this Live Más Café, Taco Bell flagship Cantina, and it’s really great and someday hopefully I get one.’”

Additional Live Más Cafés will either live inside a Taco Bell like the Chula Vista version, be a standalone store with its own distinctive Taco Bell food menu, or exist as a beverage line at a regular Taco Bell restaurant.

A Culture of Growth, Grounded in People

DRG’s expansion plans are backed by sophisticated infrastructure. Ellison and Grieve aren’t natural food and beverage operators, but they did hire executives with extensive quick-service backgrounds.

It starts with the operations team based out of DRG’s Las Vegas–based Support Center. Dunn, who’s been with the brand for six years, spent nearly 11 years at Arby’s and six years with Krystal before joining DRG. Kelly, a 10-year veteran, worked at Arby’s, Yum! Brands, and Five Guys. There’s also chief restaurant officer Tom Douglas, who’s been under DRG’s banner for eight years and worked at Arby’s and large Burger King franchisee GPS Hospitality.

Each market is led by vice presidents. And below them are plenty of other restaurateurs. For instance, in Southern California, there are 20 above-restaurant leaders covering 100-plus stores. Employees also use a mobile app to communicate, connect, and keep up with what’s going on at the Support Center and other markets, like key announcements, birthdays, promotions, or special community grants.

“We have a lot of things that come out of the Support Center, whether it’s ideas or thought process or executing the brand mission, but the key is that we have the right leader in each individual market that runs that market that really owns the people, owns the process, owns everything that we’re trying to execute in each market,” Kelly says. “Whether it’s in Southern California, Northern California, Alaska, and Kansas City, especially in our satellite markets where we don’t have those state pieces, you got to have the right leader in there, and at times we’ve struggled with that in the past where we thought we could do it right with just executing out of [the Support Center], but we realized in order to hit our growth model you just got to have the right person.”

When it comes to culture, while most organizations develop values to follow, Kelly believes DRG took the opposite approach. The leadership team looked at who they were, what they do, and how they live, and created a culture around it. DRG’s main purpose is to positively impact its team members and the communities it serves by doing the right thing, being authentic, innovating, having fun, and winning together.

“We don’t try to put up a front,” Kelly says. “We’re not fake. We’re not political. We’re not red tape. We’re just who we are. We don’t try to make people mold into what we want them to be. We try to help people be good at who they are and what they do. And sometimes it’s hard for us because we all have come from an ops background. We all come from a driven background, but we’re all learning more. Let people just be good at who they are. Give them the freedom, trust that they’re making the right decisions, and just have fun with it and enjoy what we’re doing.”

Dunn says DRG helps people “tap into their potential that they didn’t even know they had within themselves through creating those opportunities.” On its website, the company lays out a clear pathway for Taco Bell and Arby’s employees to work their way up from team member to director of operations. Employees have access to comprehensive benefits along that journey, like a 401(k), tuition assistance, and DRG Cares, a 501(c)(3) set up to help workers in times of crisis.

DRG uses these brand standards as guardrails for implementing operations. Teaching workers how to make tacos or roast beef sandwiches is a basic part, but the people side of the business and soft skills training is crucial, according to Douglas. The executive gave an example of one vice president who teaches newly promoted workers about financial planning and how to set goals to climb out of debt.

“I’d like to define what we do as a people-first culture. As I said for years when I got here, it has nothing to do with the product we serve,” Douglas says. “Tacos and roast beef is our business, but it’s really about the people and how we deliver upon that. So when you think about people first, you have to put yourself in their situation and understand where they’re coming from. And one of the exciting things with being here going on eight years here, we were growing so fast, we were acquiring all these different companies and you had a bunch of different cultures and it was really about coming in and showing them that we care for you.”

Hospitality is one of Taco Bell’s biggest priorities. The brand ranked as the fastest drive-thru, by total time, for the fifth straight year, according to the QSR Drive-Thru Report, but now the focus is on how to deliver a consistent one-on-one experience with the guest from the time they pull into the parking lot until they pick up their order and depart. And for third-party deliveries, making sure the Taco Bell culture extends to customers’ homes.

“The push right now is really on that ‘hosBELLtality’ piece and how we tie the great product quality, the speed, with being friendly and being the friendliest in the community,” Douglas says. “So that’s the push that the brand’s going through, and we do a lot of unique things that we’ve been doing for years to try to bring that piece in, but that’s the brand’s push right now is that hospitality.”

In the same vein, DRG prides itself on community involvement.

Diversified Restaurant Group enjoys giving back to local communities.

The company raises money through the Taco Bell Foundation’s Round Up program and gives away several Taco Bell Foundation Live Más Scholarships to college students. Internally, DRG launched a Women’s Leadership Network to uplift women in the foodservice industry. The group also has special relationships with the Boys and Girls Clubs, Big Brothers Big Sisters, and Junior Achievement.

“I think the one piece that makes us people-centric is our ability to connect within our communities as well as with our teams,” Dunn says. “…We have several people within the organization that are part of different organizations and charities that they’re giving and investing back their time within their communities, which create those long-term connections, which I think makes us definitely different from other organizations because we encourage that. And I think it’s our way to connect with the community and really live out our purpose.”

Innovation Never Stops 

On a national level, Taco Bell is one of the highest-performing brands in the fast-food segment.

As of early August, the chain hadn’t had a single week of negative sales throughout 2025, and continued to take share from fellow fast-food and fast-casual brands. Among the top public restaurant chains, Taco Bell is the only one to never have a negative quarterly same-store sales result in the past five years.

Tresvant says Ellison and the DRG team are an integral part of the Mexican chain’s success.

“Strong operations start with great leadership, a commitment to people, and a deep respect for the brand—those qualities shine through in how SG Ellison and his team run the DRG business,” Tresvant says. “SG combines operational rigor with an innovative spirit, always looking for ways to elevate the Taco Bell experience. That balance not only drives DRG’s success but also helps raise the bar across our system. When one franchise partner delivers at that level, it inspires everyone to keep pushing for excellence and chasing greatness together.”

Arby’s is more of a turnaround story. The company earned $4.325 billion in U.S. systemwide sales in 2024, down from $4.617 billion in 2023. Arby’s overall domestic unit count also decreased by 50 restaurants across 2023 and 2024.

The brand recognizes DRG as a major part of retelling its story and getting back in front of customers. The franchisee has a leadership presence on the Arby’s Franchise Association and the Operations Council.

“As a trusted test partner, DRG has helped pilot a wide range of innovations, from new products and equipment to procedures and design elements,” says Arby’s brand president David Graves.

As for DRG’s future, expansion into other restaurant concepts—or outside of the restaurant industry completely—is a real possibility. Ellison says the company is hoping to grow with “high-quality businesses that are growth-oriented and that have something the consumer responds to in a positive way.”

Whatever it may be, Ellison is happy to try something new. He always has been.

“Innovation equals fun,” Ellison says.