Two months into her tenure as CEO at El Pollo Loco, Liz Williams laid out a five-part strategic plan to drive sales and growth while decreasing costs. These tactics, which she shared during a Thursday earnings call, include improving brand awareness and the guest experience, fostering a digital-first mindset, increasing unit-level economics and building new units with lower buildout costs. 

“El Pollo Loco should be and will be a national brand, and I believe we have the right strategy in place to achieve our immense potential,” Williams said in an earnings release. 

The company ended the first quarter with strong same-store sales, which were up 5%. Comparatively, the chain’s same-store sales were up 0.9% in the fourth quarter. Restaurant contribution margins were 17.6% compared to 15% in the previous year’s quarter, while revenue rose to $116 million compared to $114.5 million in the year-ago quarter. 

Check out the five pillars of El Pollo Loco’s growth plan below.

‘Brand that wins’

Williams said the chain needs to “sharpen our brand positioning by leaning heavily into our key differentiator” — grilled chicken and Mexican flavors. The chain is already known for its quality ingredients, freshness and customization alongside its value proposition and fast service, she said. Grilled chicken and a Mexican flavor profile are also two of the fastest-growing food categories, she said. 

“We need to spend more time communicating these messages to an expanded consumer base across traditional and digital channels,” Williams said. “We are also focused on simultaneously bringing thoughtful innovation and affordable options back to the brand's bottom line. We have an incredible opportunity to position the brand for consistent long-term traffic.” 

‘Hospitality mindset’

El Pollo Loco is focused on delivering better speed and consistency across its operations, Williams said, adding that this starts with “clear systems, processes, tools and training programs.” 

“We know we have an opportunity for simplification and to continue to focus on priority labor initiatives to drive speed and make the team member jobs which will also enhance customer service,” Williams said. 

The chain has already been rolling out new equipment to help simplify salsa preparation that can help decrease labor needs. El Pollo Loco is also adding kiosks to provide more efficient ordering for customers. 

‘Digital first’

El Pollo Loco has several investments in customer-facing technology, such as its loyalty program — which it revamped last year — online ordering, mobile app and integrated delivery through third-party partners. The company is investing in digital menu boards and order confirmation boards, as well. 

Kiosk ordering when combined with a cash machine has already helped serve guests “more efficiently with less labor,” Williams said. El Pollo Loco remains on track to complete the kiosk rollout in all of its company-owned restaurants this summer, and franchisees are actively deploying the units. 

“We are also exploring new digital technologies in the drive thru that enhance the customer experience and further automate ordering,” Williams said. 

‘Winning unit economics’

Historically, El Pollo Loco has had higher restaurant-level margins. During 2018 and 2019, margins were 19% and 18.7%, respectively. Williams said the chain is focused on getting back to that higher range. In addition to its labor productivity focus, the chain is reviewing all aspects of the business, including cost of goods sold (COGS), utilities and other controllables.

“We have identified several areas of improvement, but more importantly, we're doing them methodically to ensure it does not impact our high quality foods or the guest’s experience,” Williams said. 

The company is too early in the process to identify the total potential savings of this plan, she said. 

El Pollo Loco is incorporating an updated brand image at its stores through a remodel program. Remodels are already showing positive returns and improved sales, she said. The chain is incorporating feedback from remodels to further improve value engineering before a full rollout. 

‘New unit growth’

The chain’s first focus under this pillar is to updating its restaurant design and lower prototype costs, which are currently $2.2 million. 

“Simply put, that is too expensive to drive consistent, long-term franchise growth,” Williams said. 

El Pollo Loco is working with several partners to reduce the cost and optimize the value of this prototype, but Williams didn’t share specifics. El Pollo Loco didn’t immediately respond to a request for comment about these cost reductions. 

The chain is also offering franchise incentives and is increasing franchise recruitment efforts and support for new and existing operators, she said. Currently, El Pollo Loco expects to open two company-owned units this year and five to seven franchised units. The company had 495 units as of the end of the first quarter, with 323 franchised locations and 172 company-owned restaurants. 

“These initiatives combined with more marketing and operations focus on new markets will ensure that as new markets open, we have more to come,” Williams said.