The El Pollo Loco franchise requires a total investment of $794K – $2.69M with a 5.0% royalty fee and operates 498 units in the QSR category. This report analyzes the full Franchise Disclosure Document including unit economics, fee structure, growth trends, and risk indicators to help you evaluate the cost of investing in El Pollo Loco.
Critical issues identified from FDD analysis that warrant serious consideration before investing.
Composite quality score based on growth, stability, efficiency, fees, transparency, and system size.
Estimated initial investment range as disclosed in the most recent FDD.
| Line Item | Low Estimate | High Estimate |
|---|---|---|
| Franchise Fee | $40,000 | $40,000 |
| Real Estate | $7,000 | $25,000 |
| Buildout | $248,250 | $980,000 |
| Buildout | $150,000 | $564,000 |
| Other | $0 | $12,000 |
| Other | $20,000 | $110,000 |
| Equipment | $200,000 | $570,000 |
| Technology | $15,000 | $70,000 |
| Training | $1,000 | $7,000 |
| Training | $2,000 | $25,000 |
| Inventory | $20,000 | $25,000 |
| Signage | $30,000 | $70,000 |
| Signage | $1,500 | $2,500 |
| Signage | $9,000 | $20,000 |
| Real Estate | $5,000 | $10,000 |
| Insurance | $10,000 | $20,000 |
| Other | $5,000 | $5,000 |
| Other | $5,000 | $30,000 |
| Working Capital | $25,000 | $100,000 |
| Total | $793,750 | $2,685,500 |
Ongoing fees as disclosed in the FDD.
| Fee Type | Rate | Type | Basis | Frequency |
|---|---|---|---|---|
| Royalty | 5.0% | PCT | Net Sales | monthly |
| Advertising Fee | 5.0% | PCT | Net Sales | monthly |
| Market Study and/or Impact Analysis | N/A | VARIABLE | Per Study | one_time |
| Testing | N/A | VARIABLE | Per Test | one_time |
| Audit | N/A | VARIABLE | Per Audit | one_time |
| Insurance | N/A | VARIABLE | Actual Cost | one_time |
| Training Fees | $500 | FIXED | Per Week Per Manager | one_time |
| Reimbursement for taxes, products, services, and other payments | N/A | VARIABLE | Actual Cost | one_time |
| Correction of Deficiency or Unsatisfactory Condition | N/A | VARIABLE | Actual Cost | one_time |
| Inspection and Coaching Assessments | N/A | VARIABLE | Actual Cost | one_time |
| Late Charge | 15.0% | PCT | Per Annum on Delinquent Payments | one_time |
| Fees to evaluate and approve alternate suppliers | N/A | VARIABLE | Per Evaluation | one_time |
| Obsolete Inventory Fund | $0 | FIXED | Per Case on vendor invoice price | one_time |
| Costs and Attorneys' Fees | N/A | VARIABLE | Actual Cost | one_time |
| Rent | N/A | VARIABLE | Monthly | monthly |
| New Franchisee Transfer Administration Fee | 40.0% | PCT | Of then-current Initial Fee | one_time |
| Existing Franchisee Transfer Administration Fee | 25.0% | PCT | Of then-current Initial Fee | one_time |
| Developer Transfer Administration Fee | $10,000 | FIXED | Per Transfer | one_time |
| Entity Administration Fee | $500 | FIXED | Per Change | one_time |
| Trust Transfer Administration Fee | $500 | FIXED | Per Transfer | one_time |
| New Principal Administration Fee | $2,500 | FIXED | Per New Principal | one_time |
| Computer systems maintenance and support | $1,050 | FIXED | Monthly per Restaurant | monthly |
| Indemnification | N/A | VARIABLE | Actual Cost | one_time |
| Intranet Fee | N/A | VARIABLE | Annual per Restaurant | annually |
| Franchisee Page Fee | N/A | VARIABLE | Annual per Restaurant | annually |
| Remote Ordering | 1.3% | PCT | Gross Sales per order | monthly |
| Gift Cards | N/A | VARIABLE | Per Transaction | monthly |
| Customer Feedback Program | N/A | VARIABLE | Pro-rata share of costs | monthly |
| Loyalty Program (Loco Rewards) | 1.35% | PCT | Gross Sales per order | monthly |
| Third-Party Delivery Program | N/A | VARIABLE | Gross Sales per order | monthly |
| Point-Of-Purchase Material Fees (POP Fees) | N/A | VARIABLE | Cost plus administrative fees | monthly |
| Indoor Digital Menu Board – Dining Room | $19 | FIXED | Per menu panel monthly | monthly |
| Kiosk | $1,450 | FIXED | Per unit annually | annually |
| Learning Management System | $19 | FIXED | Monthly per Restaurant | monthly |
| Security Services | $600 | FIXED | Annual | annually |
| Successor Fees | 50.0% | PCT | Of then-current Initial Fee | one_time |
| Remodel Administrative Fee | $5,000 | FIXED | Per Remodel | one_time |
| Refresh Administrative Fee | $2,500 | FIXED | Per Refresh | one_time |
| Early Termination Fee | N/A | VARIABLE | Average monthly Royalty and Advertising Fees | one_time |
| Outdoor Order Confirmation Board (OCB) | $19 | FIXED | Monthly per display | monthly |
Financial Performance Representations not disclosed by this franchisor
Approximately 40% of franchisors choose not to include Item 19 financial performance data in their FDD. This does not necessarily indicate poor performance -- it simply means the franchisor has elected not to disclose this information.
Model your personal financial scenario by adjusting the assumptions below.
Automated risk indicators based on FDD data analysis.
Franchise unit trajectory based on FDD Item 20 data.
| Year | Start | Opened | Closed | Transferred | End | Closure Rate | Net Growth |
|---|---|---|---|---|---|---|---|
| 2022 | 291 | -- | -- | -- | 302 | -- | +11 |
| 2023 | 302 | -- | -- | -- | 323 | -- | +21 |
| 2024 | 323 | -- | -- | -- | 325 | -- | +2 |
How El Pollo Loco compares to peer brands in the QSR category.
Ratio = Investment midpoint ÷ median annual revenue. Lower is better. A 0.5x ratio means the initial investment equals half of one year's gross revenue. Does not account for operating costs, margins, or time value of money.
| Brand | Total Units | Investment Range | Median Revenue | Royalty | Inv/Rev Ratio |
|---|---|---|---|---|---|
| Subway | 19502 | $3K – $630K | No Item 19 | -- | -- |
| McDonald's | 12772 | $1.47M – $2.64M | No Item 19 | 5.0% | -- |
| Dunkin' | 8499 | $527K – $1.83M | $1.43M | -- | 0.8x |
| Domino's Pizza | 7043 | -- | $24K | 5.5% | -- |
| Burger King | 6701 | -- | No Item 19 | -- | -- |
| Wendy's | 5552 | $393K – $2.99M | $2.23M | 4.0% | 0.8x |
| Little Caesars | 3705 | $446K – $1.82M | No Item 19 | 6.0% | -- |
| KFC | 3558 | $135K – $3.77M | $1.27M | 5.0% | 1.5x |
| Papa John's | 3291 | $261K – $853K | No Item 19 | 5.0% | -- |
| Popeyes Louisiana Kitchen | 3177 | $505K – $3.92M | No Item 19 | 5.0% | -- |
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