This Popular Mexican Chain Had a "Disappointing" 2021
The popular fast-casual Mexican chain El Pollo Loco has made a strong post-pandemic comeback. As of this February, the chain's sales grew by 7.4% compared to the same time last year, according to QSR Magazine. However, the brand has been underperforming in one entirely different but crucial area: expansion.
Last March, El Pollo Loco announced major plans for growth, with a focus on tapping into markets in Colorado, New Mexico, parts of Texas, and its home base of California. Within the next five years, the goal is to open 140 restaurants in the Western United States. But despite making deals with restaurant operators TWS Restaurant Corporation, LMU investments, and Pikes Pollo, the L.A.-Mex chain is not meeting its development goals. Since unveiling its initial expansion plans, El Pollo Loco has only signed on to launch 17 new locations.
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"Clearly, our message is not getting out there as effectively as we would like," Larry Roberts, El Pollo Loco's CEO, said during the company's fourth-quarter earnings call.
Currently, the chain operates some 480 locations across Arizona, California, Nevada, Texas, Utah, and Louisiana.
In an effort to better capture quality franchisees, El Pollo Loco will have senior management involved in the early stages of the recruiting process, launch a new franchising website, and realign the brand's messaging by further embracing its L.A.-Mex culture to attract younger consumers.
Beyond the shift in El Pollo Loco's franchising strategy, the chain is also focusing on streamlining other restaurant operations. To accelerate the cooking process, employees will use stemless serrano peppers and pre-cut cilantro, while the company is currently testing a new machine that will reduce the amount of time it takes to make salsa. El Pollo Loco will also be testing a simplified menu later in 2022 to maximize order accuracy and service speed.
"So there's a lot of work going on to see how we might improve our margins across the board," Roberts said. "So at the same time, what we want to be really, really careful about is, don't do anything to jeopardize the quality of the food."
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