WHEN THE CHIPS WERE DOWN HOW ONE MAN STARTED THE EL TORITO CHAIN 50 YEARS AGO.

Byline: Brent Hopkins Staff Writer

When Larry Cano's Air Force hitch was up in '54, he thought he'd get himself a bar.

The one-time law student-turned-fighter pilot didn't have much expertise in the restaurant business beyond washing dishes in a mom-and-pop joint in East L.A. He was 30 years old and had come to Van Nuys with the Air National Guard, armed with plenty of desire but little practical experience. But he had a few recipes and knowledge of an exotic sounding foreign drink known as tequila, so he bought out a closed Polynesian restaurant on Ventura Boulevard in Encino.

Drawing on his Mexican-American heritage, he remade the place into a little restaurant he called El Torito.

Half a century later, Cano's dream has morphed into an international chain spanning as far as Turkey and Abu Dhabi. A string of corporate owners has remade it into a 69-location operation, serving tortillas in Tokyo and fajitas in Phoenix. As the chain celebrates its golden anniversary this month, it's a far cry from the place that ran out of food on its first day in business.

``What people don't realize that, at the time I started, there weren't really that many Mexican restaurants,'' said Cano, who retired from the company in 1988. ``People didn't know what a taco was back then - they called them 'tay-cos' and wondered why anyone would eat Mexican food. It still astounds me that they've learned to eat jalapenos today.''

Cano juggled a busy workload with financial hardships in his early days. After getting evicted from his house, the nascent restaurateur built some bunks and a shower into the back of the restaurant and lived there. In time, he got enough capital to buy a few more failed restaurants until he had a small chain in the Valley. In 1968, the chain gave birth to its flagship Marina del Rey location, which grossed the then-impressive sum of $3.5 million its first year off $5-a-plate meals.

After building up to 22 locations in 1978, Cano sold to W.R. Grace & Co., a New York conglomerate that built it into a nationwide presence. Though the chain swelled to several hundred locations, it shuttled between four different owners before Real Mex Restaurants Inc. of Long Beach acquired it in 2000. During transitions, stores closed, and the chain lost some of its luster.

Though still popular, El Torito did little to impress gourmet tastes. Whereas Cano had been fairly cutting-edge when he first started, there were legions of Mexican restaurants by the 1990s. An enchilada and taco combo plate didn't seem so exotic, especially as American palates became more seasoned.

``It's like white bread with the crust taken off,'' said Mario Martinoli, who hosts a restaurant show on KFI-AM (640). ``Is the food bad? No. It's good, but if you live in Southern California, why bother? There's so many great Mexican restaurants that will give you an authentic plate of food.''

Real Mex, set to become the country's largest Mexican chain operator with its pending acquisition of the Chevy's chain, decided it needed to improve El Torito's image to appeal to a more mid-market customer. The company already had a more modestly priced chain with its Acapulcos and an upscale option with its El Torito Grills, so it decided to make the venerable operation a little more adventurous.

Enter Jose Roberto Lopez.

Though he'd concocted dishes for the chain since 1978, the executive chef suddenly took on a much more prominent role. Fresh Mex dispatched him to his native Mexico to become more versed in regional dishes and began adding the specialities to the menu on a trial basis. His grinning, mustachioed face showed up on menus, as well, and he became known simply as Chef Pepe.

Though he's played an instrumental role in winning the chain back some of its culinary credibility, Lopez has found his newfound role to have an unusual, unintended consequence.

``People don't think I exist, that I'm not a real guy,'' he said, laughing. ``When I first started, I was a little concerned because El Torito was a little bit different than what I was used to. But now, I love it, I'm very happy with the way it is.''

Lopez and Real Mex toe a very fine line, having to provide meals that are exotic enough to make the chain different enough from a standard diner like Chili's, but not too far from mainstream tastes. To fans, the combination of standard fare like cheese enchiladas and less-middle-of-the- road offerings like crepas de huitlacoche, crepes filled with corn truffles, chicken and squash blossoms, works.

``Every now and then, you've just got to have some chips and salsa,'' said Fred Wolfe, Real Mex's president and chief executive officer. ``You get that and a margarita, and you're on your way. It's a casual environment you feel safe to celebrate in.''

Such was the case for Robert Smith and Miles Brandon, friends lunching at the Encino spot that has become the chain's oldest location. They opted for a chile relleno combo and a chicken Caesar salad, respectively, enjoying the food's reliability as much as its taste.

``It's a name that people know,'' said Smith, a North Hollywood resident who's a campus director for Pepperdine University. ``You know what you're going to get when you come in.''

Brandon, a Simi Valley computer consultant, agreed. Though cognizant that it's a corporately owned chain, he said it was close enough to the real thing for him.

``Other than my mom's cooking, this is the first Mexican food I ever had growing up,'' he said. ``It feels more authentic, where Acapulco feels like a chain. Even though it isn't what you'd get in East L.A., it's good.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

CAPTION(S):

2 photos

Photo:

(1 -- 2 -- color) Waiter Sergio Jimenez, above, has worked at the original El Torito on Ventura Boulevard in Encino for 23 years. Below, waiter Alberto Gutierrez garnishes some appetizer during the lunch rush.

Gus Ruelas/Staff Photographer