El Pollo Loco is beginning to look beyond the repair phase of its turnaround and toward a faster pace of restaurant development.
The company reported that systemwide comparable restaurant sales increased 3.9% in its second quarter. Total revenue rose to $129.6 million from $125.8 million, and income from operations increased to $18.7 million from $11.3 million.
El Pollo Loco also reiterated its expectation for three to four company-operated openings and 15 to 16 franchise-operated openings in 2026. Together, that implies 18 to 20 new restaurants if the company and its franchisees complete the planned openings.
The performance underneath those numbers is mixed in an important way. At company restaurants, a 4.2% increase in average check more than offset a 1.1% decline in transactions. Franchise restaurants showed a similar pattern: check increased while transactions declined.
That means expansion is being supported by stronger sales and restaurant margins, but not yet by broad traffic growth. Management raised its full-year comparable-sales and adjusted-EBITDA outlook while saying sustainable traffic growth remains a priority.
The development plan is therefore a test of whether operational improvement can travel. New restaurants require capital, capable franchisees and demand in markets where the brand may have less recognition than it does in the West.
What happens next is execution against the opening range—and a closer look at transactions. If El Pollo Loco can add units while turning check-led growth into guest growth, it will have moved from stabilizing the business to expanding it.