El Pollo Loco Files to Go Public
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Another fast-casual restaurant is hungry for investors' money.
El Pollo Loco, a Mexican restaurant franchise focused on grilled chicken, filed for an initial public offering on Tuesday. The chain has over 400 restaurants, primarily in California. All 168 company operated and 233 franchised restaurants are in five Western states.
The chain is aiming to raise $100 million, likely a placeholder value.
The move follows a string of high-profile public debuts in the fast-casual sector, including Mediterranean chain Zoes Kitchen, which went public in April, and take-and-bake pizza chain Papa Murphy's, which went public in May.
The Mexican chain attempts to appeal to both the fast-food and fast casual market, claiming to "offer the food and dining experience of a fast-casual restaurant and also offer the speed, value and convenience of a QSR [quick service restaurant]." While El Pollo Loco hopes to set itself apart with its focus on "fire-grilled chicken," the chain considers its competitors to include fast casuals such as Chipotle, Panera and Qdoba, and fast-food chains including KFC, Chick-fil-A and Taco Bell.
The company has had 11 straight quarters of same-store sales growth, according to its filing with the Securities and Exchange Commission. The chain also said its net loss narrowed to $16.9 million in 2013 from $32.5 million in 2011.
This isn't the first time that El Pollo Loco has made moves to enter the public market. The company, owned by Trimaran Capital Partners, filed for a $135 million IPO in 2006 on the heels of Chipotle's IPO, but withdrew its plans citing difficult market conditions. At that time, El Pollo Loco was attempting Eastern expansion, an effort that ultimately failed.
El Pollo Loco was founded as a roadside chicken stand in Mexico by Juan Francisco Ochoa in 1975. The chain was acquired by Denny's, Inc. in 1983, and publicly traded under the family restaurant chain's parent company in the 1980s and '90s. In November 1999, equity investment firm American Securities Capital Partners, L.P. acquired El Pollo Loco for $128 million, and sold the chain in 2005 to Trimaran Capital for $400 million.