EL Pollo Loco has committed to remodeling around half of its restaurants across the United States.
The Mexican-style chain noted that it would work with its franchisees to complete the updates in a multi-year plan for customers.
El Pollo Loco is making moves to modernize its restaurant locations[/caption]
The new prototype (pictured) will be implemented at several spots this year[/caption]
An effort to create “new prototype” locations comes as El Pollo Loco’s 50th anniversary approaches in 2025.
El Pollo Loco opened its first store in Mexico in 1975, quickly expanding to the United States in 1980 with another location in Los Angeles.
El Pollo Loco said it seeks to leave a “modern legacy of curated experiences, inspired by place and punctuated by new menu innovation,” per an October 29 press release.
Included in the changes will be an updated color palette and materials used for the build, along with LED lighting and an energy-efficient HVAC system.
Liz Williams, El Pollo Loco CEO, emphasized that the chain worked hard on “simplifying the build structure” and the best methods for “rethinking equipment packages, decor [and] signage design,” during a recent earnings call.
In May, Williams also promised more “affordable options” on the menu, along with digital kiosks for ordering and improved kitchen equipment.
The CEO praised the “clean and simple design” of the prototypes, which would help with El Pollo Loco’s five-part plan for the remodels.
That includes reducing buildout costs, improving hospitality, creating a clearer brand position, adding a digital focus, and increasing sales.
CONTINUED TREND
El Pollo Loco’s intention to increase sales with remodels follows an approach similar to several other chains in recent years, including Burger King, Denny’s, and Wendy’s.
Burger King’s massive remodeling program has already seen sales improvements, and 400 locations are expected to be finished by the end of 2024.
El Pollo Loco seeks to capitalize on its note of decreasing buildout costs as well.
The cost for the new restaurant design was $2.2 million this spring, which Williams noted at the time as “too expensive to drive consistent, long-term franchise growth.”
Its targets have since been reduced to $1.8 million instead.
“We continue to make great progress on reducing the cost of our prototype to stimulate future restaurant development,” Williams said on the call.
Some highlights of this new prototype are this iconic design that’s uniquely El Pollo Loco…an evolutionary rather than revolutionary design that allows us to coalesce the system around a new prototype design and bring along past prototype designs.
Liz Williams
ELEVATED EXPANSION
About six to eight current company remodels will be finished by the end of 2024, along with 35 to 40 franchisee locations, according to El Pollo Loco CFO Ira Fils.
Additionally, several new company-owned and franchisee locations featuring the prototype design will open in 12 to 18 months.
“We intentionally slowed our remodel program as we are in the process of developing a new, more modern look and cost-engineered design,” Fils said following William’s statements.
“We are very excited about this new design, and we anticipate completing our first company remodel with the new design in the fourth quarter of 2024.”
DEVELOPMENT DECADE
In total, there will be a five-year and 10-year investment made into the “refresh” and remodel of the El Pollo Loco locations.
El Pollo Loco currently has 495 locations in seven states but will have 500 by the end of the year.
Williams also detailed plans for about 10 more openings in 2025, per the release.
“Through our renewed approach to menu innovation and brand positioning, our methodical cost savings initiatives, and flexible and affordable new unit development plan, we are well positioned to capture the growth opportunities ahead and make El Pollo Loco the national fire-grilled chicken brand,” the CEO told investors.
She also noted that El Pollo Loco would continue to keep an adaptable business model for the opening of non-traditional locations with drive-thrus and more.
El Pollo Loco also recorded a 2.7% sales growth during the last fiscal quarter.
