Expanding El Pollo Loco
Chicken chain develops new prototype for nationwide, multi-unit franchise expansion.
Susan Fishman

El Pollo Loco is expanding in parts of the U.S.with units like this one, located inCalifornia’s Moreno Valley.

“We operate in what we call the ‘sweet spot’ between fast food and fast-casual because we have the quality food that matches up with the fast-casual people, but we can deliver it with the convenience of a drive-thru window,” he says.

Founded in Guasave, Mexico, in 1975, El Pollo Loco (Spanish for “The Crazy Chicken”) has 340 restaurants — 193 franchises and 147 company owned and operated locations. The majority of restaurants are located in California, but the company also has locations in Arizona, Nevada, Texas and Illinois.

Last year the company introduced a “Next Generation” prototype restaurant, which is expected to have broad demographic appeal in new markets and design flexibility to deliver maximum returns in end cap, in-line drive-thru locations and freestanding formats. The restaurants currently fit into a 2,300 square-foot footprint, as well as a 3,100-square-foot space.

“The goal was to simplify operations, so we developed a whole new kitchen that has a modified cooking process and helps with labor training and food safety,” notes Carmichall. “It also enables us to have a more flexible kitchen that will fit into smaller and more varied footprints.”

Incorporating the breakthrough learning from its high-volume restaurant in Universal Studios Hollywood, El Pollo Loco opened a corporate-owned Los Angeles location for the new prototype in August 2004. Company executives report that the Los Angeles prototype restaurant performed above El Pollo Loco’s last reported average unit volume of $1.46 million for company-operated freestanding units.

 The new design has proved popular in that it creates an open atmosphere that encourages customers to relax, stay longer and enjoy the El Pollo Loco experience. The interior features a rich color palate and custom wall mural that communicates the fresh, healthful appeal of El Pollo Loco’s signature bone-in chicken, which is natural, farm-raised and hormone-free, and authentic Mexican offerings. A customized sound system plays contemporary Latin-influenced music and new locations feature flexible, freestanding seating and padded booths to accommodate parties of all sizes.

Brian Carmichall, vice president of development for Irvine, California-based El Pollo Loco.

Also last year, El Pollo Loco announced its first major expansion east of the Mississippi River with an aggressive initiative to promote multi-unit franchise ownership in new markets around the country. Initial expansion plans are expected to add 130 plus franchise-operated locations in the Southwest, Midwest and Eastern United States by 2009. This year, the company has on the board 16 franchise openings and 10 company openings. The company locations are primarily in California and Nevada; the franchise locations will be in Boston, Denver, Connecticut, California and Arizona.

El Pollo Loco has several development agreements signed for the New England area, Chicago, Washington State and pending agreements around the country. Carmichall says the company is primarily looking for freestanding locations with drive-thrus, but will also look at prominent end-cap locations that are located around strong retail generators. Demographic criteria include a residential population of 35,000 and a daytime work population of 5,000 within a 1-mile radius.

“We are looking for experienced developers and multi-unit operators — people who have experience not only successfully operating restaurants but also developing restaurants,” says Carmichall. “With our existing group, the average franchisee has four or five restaurants; newer franchisees coming into the system are much larger and they generally have many restaurants under several different brands. It depends on the area, but we’re generally looking for a minimum three-unit development agreement.”

Specializing in citrus-marinated, flame-grilled chicken, El Pollo Loco offers a wide variety of contemporary Mexican-influenced entrees in addition to its famous fresh chicken, which is marinated in a signature recipe of herbs, spices and citrus juices, passed down from the founding family. The chicken is then flame grilled, hand cut and served hot off the grill with warm tortillas, freshly prepared salsas and a wide assortment of side accompaniments. The menu also includes dishes inspired by the kitchens of Mexico, including grilled burritos, The Original Pollo Bowl, Pollo Salads, Tacos al Carbon, Chicken Tortilla Soup, quesadillas and more.

Headquartered in Irvine, California, El Pollo Loco, Inc. is a privately held company owned by Trimaran Capital Partners and company management. Trimaran is a private asset management firm, headquartered in New York with assets under management and committed capital in excess of $3 billion.