Taco Cabana was founded by Felix Stehling in September 1978 with its first restaurant at the corner of San Pedro and Hildebrand Avenue in Midtown San Antonio. Stehling purchased a vacant Dairy Queen because the family needed additional parking space for their popular bar across the street, the Crystal Pistol. Stehling decided to open a taco stand. The open-air design of the existing structure led to the "patio cafe" concept that defined the chain's subsequent locations. Felix Stehling's wife, Billie Jo Stehling, created the décor and interior theme for the restaurant chain. After finding all of the patio furniture stolen following the first night of business, Stehling decided to keep the place open 24 hours.