El Pollo Loco is working through a turnaround. However, CEO Liz Williams wants to be clear about what kind of turnaround this is.
To start, the food doesn’t need to be fixed or improved. El Pollo Loco’s menu—signature fire-grilled citrus-marinated chicken, tacos, burritos, salads, guacamole, and salsas prepared daily by hand—earns high-quality scores and accolades that place the chain ahead of other QSR players.
In late January, the brand launched its first menu innovation in years with Mango Habanero, a new flavor for the bone-in fire-grilled chicken. El Pollo Loco followed that up by making it available on the Tostada Salad. The innovation is not only delivering on taste and value—driving trial from new and existing customers—but it’s also proven to be simple to execute. The flavor drove mix toward bone-in chicken, which El Pollo Loco hadn’t seen in a long time.
“[Mango Habanero] has reinforced the fact that there’s a huge opportunity to continue to do flavor innovation,” Williams said during El Pollo Loco’s Q4 earnings call. “What I love about flavor innovation, consumers love it. That’s the first thing I love. It gets people excited. It gets them trying. While people still love our citrus-marinated OG, the original, they also like to try something new. So there’s a win there. But there’s also a win for our operator group and our restaurant team members in that it’s a relatively easy innovation for them to execute. So you can rest assured that we are testing and thinking through many different options as we go forward. I think we all see in the chicken category, flavor is a big idea.”
Further innovation is coming with sauces, flavors, and the rollout of fresco wraps and salads this spring and quesadillas this summer. The wraps are in response to guests—busy and on-the-go—wanting more handheld items. The quesadilla, which has performed well in market tests, is a “big, hearty eat” with white meat chicken, guacamole, salsa verde, and creamy chipotle sauce. There are a couple of other options the brand is testing to close 2025, and it’s already working on the pipeline for 2026.
Williams believes the quesadilla can deliver on innovation and value. The product will be offered as a combo with chips and a drink for around $9 to $10. That’s in addition to existing value around promotions like Taco Tuesday and the $5 Hoya Bowl.
“I would say we are much more planful than we’ve been in the past,” says Williams, describing the cadence of innovation. “And you can be planful when you have a pipeline and you have a team that’s really thought through all the different options that are out there and you’re constantly testing and innovation is part of the DNA. And I would say all those characteristics are things that we’ve implemented in the last couple of months … When I look at the pipeline, there are many things in there that I’m excited about. In fact, there’s more things in there than there are slots on the calendar.”
The turnaround part of El Pollo Loco’s journey is doing a better job of reminding lapsed consumers and communicating to new guests that “El Pollo Loco stands for quality and flavorful food that is quick, convenient, and offers value for the money,” Williams said.
The chain changed its advertising agency at the end of 2024 in preparation for a new aesthetic, approach to marketing, and brand positioning.
El Pollo Loco also launched a remodel program that touched 52 outlets in 2024. It will cover 60 to 80 restaurants this year. The fast casual offers a two-tier approach to remodels: one is a low-cost five-year refresh and the other is an extensive 10-year investment. The company hopes to reach roughly half of its system over the next four years in partnership with franchisees.
“We are in the early days with just a few new images rolled out, however, we are pleased with the sales and the economic returns that we are seeing with the remodel and we’ll share more throughout the year as we get more data points,” Williams said.
Additionally, the brand introduced a new prototype last year that shows “an enduring yet modern and efficient design that is uniquely El Pollo Loco,” Williams said. It reduces build costs (under $2 million) and improves cash-on-cash returns.
Systemwide comps increased 0.5 percent in Q4, consisting of a 1.6 percent rise at company-operated restaurants and 0.1 percent decrease at franchise stores. The corporate comps were fueled by a 9 percent rise in average check, offset by a 6.8 percent decrease in transactions. First quarter-to-date through February 26, systemwide same-store sales increased 0.6 percent, consisting of a 2.3 percent lift for company units and a 0.4 percent decrease for franchise locations.
Last year marked the first 12 months of El Pollo Loco’s three-year turnaround plan. The chain relaunched brand standards, implemented a new labor deployment system in company restaurants, and invested in cooking equipment and kiosks. Cost-saving initiatives resulted in contribution margins of 17.4 percent in 2024, a 190-basis-point improvement year-over-year.
El Pollo Loco finished 2024 with 498 restaurants—173 company units and 325 franchise units.
The fast casual plans to open 10 locations in 2025, most of which will be outside its home state of California. There are restaurants under development in Arizona, Colorado, Idaho, New Mexico, Texas, and Washington. The chain’s 500th restaurant will open outside the Golden State in just a few months.
“The excitement we’re seeing from franchise partners continues to grow,” Williams said. “I can tell you the number of meetings that we’re taking and the franchise days that we’re hosting are also trending upward. And some of that is franchisees that were in the pipeline prior to me coming on board and prior to the turnaround and just reigniting them. So we might have been talking with them, but they perhaps put it on pause until we really got the clarity of showing the growth in terms of same-store sales growth and getting the margins back in a way that we’re growing and then reducing the build costs.”
