Bottom line
- Total investment $794K – $2.7M including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.2M/year (median $2.1M).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 54 loans (below the industry average).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one El Pollo Loco unit return on the cash you put in?
Unlevered ROIC · per unit
16%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 El Pollo Loco units return on equity?
Equity IRR · 5-yr
37.1%
4.84× MOIC
Year-1 DSCR
2.23×
EBITDA ÷ debt service
Equity required
$4.3M
on $13.4M purchase
Total debt
$9.0M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate Mexican fast-casual restaurants serving flame-grilled chicken dishes, traditional Mexican fare, and beverages. Day-to-day operations include managing kitchen production, food quality control, staffing, inventory, customer service, and compliance with corporate standards and increasingly scrutinized California labor laws.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 4 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
El Pollo Loco presents high-risk investment characteristics: negligible unit growth, withheld profitability data, going concern uncertainty, and widespread litigation affecting shareholders, franchisees, employees, and the company itself.
Score breakdown · what drove the 52 / 100 rating
- 01MEDStagnant unit growth (0.6% YoY) indicates system maturity or decline, not expansion opportunity
- 02MEDNo disclosed average net income despite $2.2M average revenue raises profitability concerns and suggests Item 19 earnings claims are withheld for a reason
- 03HIGHExtensive multi-front litigation including shareholder derivative actions alleging breach of fiduciary duty, securities fraud, labor law violations, and territorial disputes signals governance and operational problems
- 04HIGHFalse Going Concern status indicates the franchisor has serious financial or operational viability questions
- 05MEDHigh initial investment range ($793K-$2.7M) combined with undisclosed profitability and stagnant growth creates unfavorable risk-reward ratio
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
El Pollo Loco · FDD (2025) PDF