El Pollo Loco 2015 Annual Report Download - page 49

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Table of Contents
franchisees close restaurants. In fiscal 2014, we and our franchisees each closed one restaurant. Our restaurant counts at the end of each of the
last three years are as follows:
Restaurant Remodeling
We and our franchisees commenced our remodeling program in 2011 and, as of December 31, 2014, together we had remodeled 85 company-
operated and 129 franchised restaurants, or 214 system-wide, over 50% of our restaurant system. Remodeling is a use of cash and has
implications for our net property and depreciation line items on our consolidated balance sheets and statements of operations, among others. The
cost of our restaurant remodels varies depending on the scope of work required, but on average the investment is $270,000 per restaurant. We
believe that our remodeling program will result in higher restaurant revenue and a strengthened brand.
2014 Refinancing
In December 2014, we refinanced our $15 million first lien revolving credit facility (the “2013 Revolver”)
and a $190 million first lien term loan
facility (the “2013 First Lien Term Loan,” and, together with the 2013 Revolver, the “2013 First Lien Credit Agreement”) by entering into a
$200 million first lien revolving credit facility (the “2014 Revolver”) (such refinancing, the “2014 Refinancing”). The 2014 Revolver carries
longer maturities and lower interest rates than the indebtedness that it replaced. Following the completion of the 2014 Refinancing, our interest
expense declined by approximately $6 million on an annualized basis, or approximately 17% of our $36.3 million of interest expense in fiscal
2013.
2013 Refinancing
In October 2013, we refinanced our $12.5 million first lien revolving credit facility, $170 million first lien term loan facility, and $105 million
17% Second Priority Senior Secured Notes due 2018 (collectively, the “2011 Financing Agreements”) by entering into the 2013 First Lien
Credit Agreement and a $100 million second lien term loan facility (the “2013 Second Lien Term Loan,” and, together with the 2013 First Lien
Credit Agreement, the “2013 Credit Agreements”) (such refinancing, the “2013 Refinancing”). The 2013 Credit Agreements carried
45
Fiscal Year
2014
2013
2012
Company
-
operated restaurant activity:
Beginning of period
168
169
165
Openings
11
2
4
Restaurant sale to franchisee
(6
)
—
—
Closures
(1
)
(3
)
—
Restaurants at end of period
172
168
169
Franchised restaurant activity:
Beginning of period
233
229
229
Openings
5
5
3
Restaurant sale to franchisee
6
—
—
Closures
(1
)
(1
)
(3
)
Restaurants at end of period
243
233
229
Total restaurant activity:
Beginning of period
401
398
394
Openings
16
7
7
Closures
(2
)
(4
)
(3
)
Restaurants at end of period
415
401
398