In a Hispanic neighborhood on Houston's east side, the parking lots of a Burger King and Church's Chicken were vacant during a recent lunch hour while the spaces at the nearby Taquerias Arandas were all full. Most of the customers' cars and trucks had little Mexican flags hanging from their rearview mirrors.

With 35 restaurants in five Texas cities — Houston, Dallas, Nacogdoches, Waco, and Bryan — Taquerias Arandas is a popular and rapidly expanding chain that appeals to immigrants craving authentic, inexpensive Mexican food. The chain has also generated a loyal following among second- and third-generation Latinos as well as non-Hispanics.

Started more than a quarter century ago by Jose Camarena, an immigrant from Mexico, Taquerias Arandas has survived — and thrived — by focusing on three elements that are key to any small business with big plans. It has a niche, knows its customers very well, and was able to survive its founder's retirement.

Now it is positioned to pursue its ambition of growing beyond Texas and becoming a national chain.

"Taquerias Arandas is definitely on our radar," says Darren Tristano, executive vice president of Technomic, the restaurant industry consulting and research firm in Chicago. "It's an emerging chain that's tapped into the fastest growing demographic in America."

Legal and illegal Hispanic immigrants in the U.S. are estimated to number between 17 million and 19 million. According to the U.S. Census Bureau, the nation's Hispanics, who total 44.5 million, will make up a quarter of the population by 2050 and are or will soon be the majority population in 35 of America's 50 largest cities.

"Hispanics are very much into authentic cuisine," Tristano says, "and aren't impressed when a mainstream chain puts something like queso [Spanish for cheese] on the menu."

Taquerias Arandas, which is named for the town closest to Jose Camarena's birthplace in the state of Jalisco, is nothing if not authentic. Its menu includes cabrito, or goat, and menudo, a tripe and bean soup. But the real draw is the savory soft tacos like those sold at taquerias and pushcarts throughout Mexico.

At Taquerias Arandas, three tacos — soft corn or flour tortillas stuffed with cabrito, pork, chicken, skirt steak, or beef tongue and topped with lettuce and tomato — go for $1.49. Large tostadas are $2.89 and giant burritos are $3.99.

Many diners are undocumented workers who have left their wives and children in Mexico to work in the U.S. "These guys are living five to an apartment and don't know how to cook and want a taste of home," says Neil Foley, a professor of Hispanic history and culture at the University of Texas at Austin. "They walk into something like a Taquerias Arandas and get a fistful of tacos at Mexican prices and it's like they're no longer in the U.S."

Robb Walsh, food critic for the Houston Press and author of The Tex-Mex Cookbook (Broadway Books, 2004), says taquerias are proliferating in the U.S. "Taquerias are the soul of Mexican street food offering hearty, home-cooked, well-made, inexpensive food that is spicy, garlicky, and wonderful," he says. "Taquerias Arandas is just the first that has managed to become a chain."

As successful as the business was under its founder, Taquerias Arandas ran into a problem common to many small businesses when its founder decided it was time to step down. When Camarena, who speaks mostly in Spanish and declined to be interviewed, wanted to retire to his Texas ranch in 2002, he reluctantly permitted the middle of his three daughters, Judy, to assume more control.

Judy Camarena, 25, has worked at the business since she was 12, and had advanced to a managerial position in the corporate office when she was in high school. Still, she says, her father was not eager for her to run the business. "He feels women are made to make babies and stay at home," she says.