EL POLLO LOCO INC FRANCHISE AGREEMENT

Item 7 pegs total initial investment at $793,750 to $2,685,500, covering build-out for the proprietary restaurant design emphasizing fire-grilling setups. Franchise fee hits $40,000 upfront, followed by 5% royalty on gross sales plus another 5% brand/ad fund—dropping to 4% ad in LA DMA—layered with about $1,600 monthly fixed fees for POS, IT, software, and more. Item 19 shines brightly here, reporting average gross revenues of $2,192,050 and median $2,063,270 across 328 franchised units, suggesting strong top-line performance in a competitive field, though bottom-line profits depend on tight ops amid 10% total fees.

System health metrics from Item 20 show stability over volatility: 325 franchised locations in 2024 grew to 328 in 2025 (+1%), with 17 projected new units, 21 transfers, and just 6 non-renewals. Corporate owns 175 spots, balancing the 503-unit system. Twenty-three SBA loans average $712,709, indicating viable financing but not explosive uptake. Litigation in Items 3 and 20 flags territorial disputes with Bryman franchisees and a trademark case, hinting at relational strains. For investors eyeing $2M+ revenue potential, this FDD paints a mature brand with solid earnings but tempered growth—ideal for operators who thrive on efficiency, less so for expansion chasers.