El Pollo Loco 2015 Annual Report Download - page 114

Table of Contents
Because we are a holding company with no operations of our own, our ability to make payments under the TRA is dependent on the ability of
our subsidiaries to make distributions to us. Under the 2014 Revolver, our subsidiaries may make dividends and distributions to us, and we are
permitted to make payments under the TRA. To the extent that we are unable to make payments under the TRA for any reason, such payments
will be deferred and will accrue interest at a rate of LIBOR plus 200 basis points per annum until paid.
Franchise Development Option Agreement
On July 11, 2014, EPL and LLC entered into a Franchise Development Option Agreement (the “Franchise Development Option Agreement”) in
connection with the development of El Pollo Loco restaurants in the New York–Newark, NY–NJ–CT–PA Combined Statistical Area (the
“Territory”). Pursuant to the terms of the Franchise Development Option Agreement, EPL has granted LLC the exclusive option to develop and
open 15 restaurants within the Territory over 5 years (the “Initial Option”), and, provided the Initial Option is exercised, the exclusive option to
develop and open up to an additional 100 restaurants within the Territory over 10 years (the “Additional Option”). The Franchise Development
Option Agreement will terminate (i) ten years from the date of its execution or (ii) if the Initial Option is exercised, five years from the date of
the exercise of the Initial Option. LLC may only exercise the Initial Option after EPL has made the determination to begin development of
Company-operated restaurants within the Territory or support the development of the Territory. We have no current intention to begin such
development within the Territory.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
In fiscal 2014, BDO USA, LLP (“BDO”), served as our independent registered public accounting firm. The following sets forth fees billed by
BDO for the audit of our annual financial statements and other services rendered:
Pursuant to the charter of our audit committee, our audit committee is responsible for overseeing our accounting and financial reporting
processes, and for overseeing our audits. The audit committee is responsible for appointing, retaining, determining the compensation of,
evaluating, and terminating our independent auditors. The committee is also responsible for establishing and maintaining guidelines for the
retention of our independent auditors for any non-audit services and for the fees for those services, and for determining procedures to approve
audit and non-audit services in advance. The committee is further responsible for pre-approving any audit or non-
audit services provided to us by
our independent auditors, all as required by applicable laws and listing standards.
The audit committee has pre-approved all audit and permitted non-audit services provided by BDO.
110
Fiscal Year
2014
2013
Audit fees
(1)
$
629,691
$
181,000
Audit related fees
(2)
37,031
11,000
Tax fees
(3)
105,281
43,400
All other fees
29,390
9,472
Total
$
801,393
$
244,872
(1) Audits of our annual financial statements, reviews of quarterly financial statements, and services that are normally provided by
independent accountants in connection with statutory and regulatory filings or engagements, including reviews of SEC filings, including
costs associated with our IPO in July 2014 and our secondary offering in November 2014.
(2)
Audit related fees consist of the audit of our 401(k) plan and review of our Franchise Development Document.
(3)
Professional services rendered for tax compliance, tax return review and preparation, and related tax advice.