El Pollo Loco 2015 Annual Report Download - page 12

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Table of Contents
Site Selection Process
We consider the location of a restaurant to be a critical variable in its long-term success and as such, we devote significant effort to the
investigation and evaluation of potential restaurant locations. Our in-
house development team has over 95 years of combined experience building
such brands as Taco Bell, McDonald’s, Starbucks, Jack-in-the-Box, and Wendy’s. We use a combination of our in-house development team and
outside real estate consultants to locate, evaluate, and negotiate new sites using various criteria, including demographic characteristics, daytime
population thresholds, and traffic patterns, along with the potential visibility of, and accessibility to, the restaurant. The process for selecting
locations incorporates management’s experience and expertise and includes extensive data collection and analysis. Additionally, we use
information and intelligence gathered from managers and other restaurant personnel that live in or near the neighborhoods that we are
considering.
Based on our experience and results, we are currently focused on developing freestanding sites with drive-thrus. Our restaurants perform well in
a variety of neighborhoods, which gives us greater flexibility and lowers operating risk when selecting new restaurant locations.
We approve new restaurants only after formal review by our real estate site approval committee, which includes most of our senior management,
and we monitor restaurants’ on-going performances to inform future site selection decisions.
Restaurant Design
After identifying a lease site, we commence our restaurant build-out. Our typical restaurant is a free-standing building with drive-thru service
that ranges in size from 2,200 to 3,000 square feet. Our Hacienda restaurant design creates a colorful, bright, and contemporary restaurant
environment. The exteriors of our remodeled restaurants feature a signature grill architectural element that reinforces the core brand, and our
interiors feature large exhibition kitchens that allow customers to watch our grill masters prepare our fire-grilled chicken. Our colorful and
contemporary dining rooms, with seating for approximately 70 people, include comfortable booths and chairs, while large windows and soft
lighting fill our restaurants with light and warmth.
Our new restaurants are either ground-up prototypes or conversions. We estimate that each ground-up build-out of a restaurant requires an
average total cash investment of approximately $1.4 million, net of tenant allowances. We estimate that each conversion requires a total cash
investment of approximately $0.9 million. On average, it takes approximately 12 to 18 months from specific site identification to restaurant
opening. In order to maintain consistency of food and customer service, as well as our colorful, bright, and contemporary restaurant
environment, we have set processes and timelines to follow for all restaurant openings.
Our restaurants are constructed in approximately 12 weeks, and the development and construction of our new sites is the responsibility of our
Development Department. A conversion typically takes approximately two months to complete. Several real estate managers are responsible for
locating and leasing potential restaurant sites. Construction managers are then responsible for building our restaurants, and several staff members
manage purchasing, budgeting, scheduling, and other related administrative functions.
Restaurant Management and Operations
Service
We are extremely focused on customer service. We aim to provide fast, friendly service on a solid foundation of dedicated, driven team members
and managers. Our cashiers are trained on the menu items that we offer, and offer customers thoughtful suggestions to enhance the ordering
process. Our team members and managers are responsible for our dining room environment, personally visiting tables to ensure every customer’
s
satisfaction and monitoring the fresh salsa bar and beverage station for cleanliness and an ample supply of products.
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