EL POLLO LOCO TO OPEN FLOCK OF SITES IN AREA.

Byline: Pam Park Staff Writer

Building to meet the growing numbers of people crazy for fast-food chicken, El Pollo Loco announced Monday a major expansion of its company-owned and franchised restaurants.

The company will open 10 to 20 new locations in the San Fernando Valley and an additional 80 to 90 locations in the Southwest within the next five years.

The chain already has 25 Valley restaurants.

``It's a targeted market for us,'' said Brian Berkhausen, vice president of development. ``We've been very successful there. Whenever we've opened restaurants in the San Fernando Valley, they've performed well. The community is receptive to us.''

El Pollo Loco opened its first Valley location in 1984. Since then, the company has built two or three restaurants in the Valley each year, Berkhausen said.

``Going forward, we are going to continue to build the brand in that market with quality site locations and quality operators,'' he said.

El Pollo Loco now has 272 restaurants - 122 are company-owned and the remaining 150 are franchises. The 100 new restaurants are expected to be about half company-owned and half franchises and will increase the company's locations by 37 percent.

Irvine-based El Pollo Loco reported sales of $291 million in the year ending June 28. That's up 12.4 percent from the previous year.

Kristin Olsen, communications manager for the California Restaurant Association, said the market looks very good for El Pollo Loco and other alternative fast-food restaurants right now.

``More and more Americans are eating out, and more and more are taking food home from quick-service facilities or restaurants as an alternative to cooking,'' Olsen said.

Brett Hendrickson, research director of B. Riley & Co. in Santa Monica, said some publicly traded restaurants had seen their stock prices beaten down because of labor market shortages. Investors fear restaurants' earnings will decrease if they are forced to pay more to attract staffers.

``Americans are just as busy as ever, so the trend to fast food and convenient locations is one that's not going to go away no matter what happens to the labor market,'' Hendrickson said.

Since El Pollo Loco is privately held by American Securities Capital Partners, a New York-based investment group, it is not required to report earnings.

Executives attributed its strong sales growth partly to adding restaurants, but changes in its menu also played a role.

El Pollo Loco had a strong dinner business built on the chicken meals. Its lunch business has been increasing since the chain introduced more portable meals such as its chicken bowls, tostada bowls and specialty burritos.

The menu has garnered wide appeal: Berkhausen recalled seeing a television star eating next to a table of maintenance workers. ``It's quality fast food that doesn't break the bank,'' Berkhausen said.

The company is implementing a new recruiting and training program for employees and is advertising for experienced restaurateurs to operate franchises.

``We've had hundreds of inquiries,'' Berkhausen said. ``Now we're trying to find the best candidates with the best experience and the best fit. We look at financial and business history and experience and cultural fit within our company. We want people with philosophies of providing quality products and services.''

In addition to California, El Pollo Loco has restaurants in Arizona, Nevada and Texas.

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photo, chart

Photo: With the demand for fast-food restaurants increasing, El Pollo Loco will add between 10 and 20 new eateries in the San Fernando Valley alone.

Chart: Chicken run (timeline)