El Pollo Loco Faces Unsolicited Takeover

Sardar Biglari wants all the chicken. Nation’s Restaurant News reports that the Texas mogul made an unsolicited offer to acquire Costa Mesa-based El Pollo Loco through his hedge fund Biglari Capital.

The activist investor, who already owns 15% of the chicken chain, previously acquired all or part of Jack in the Box, Cracker Barrel, Friendly’s, and Western Sizzlin. Biglari also has money in insurance and oil companies and Maxim magazine, as well as stakes in Ferrari and Coca-Cola. The Roanoke Times described the Iranian-born Biglari as a “corporate raider” when he acquired the Steak ‘n Shake restaurant chain.

El Pollo Loco was first introduced to the United States with a small store in L.A.’s MacArthur Park by Juan Francisco Ochoa. The high-school dropout from Sinaloa went to work at 14 selling shoes before recruiting family members to help open a small roasted chicken restaurant in Guasave, Mexico that’s still going strong today. Workers at El Pollo Loco dressed ranchero style with overalls, cowboy shirts and cowboy hats while citrus-marinating and grilling the chicken over an open flame.

Ochoa was at the original store in Sinaloa recently doling out hugs, autographs and chicken to admirers when a plaque was unveiled honoring his history, honoring a “culinary legacy that transcended borders.” When Ochoa sold El Pollo Loco to Denny’s in 1983, he kept the Mexican operations for himself. Ochoa went on to create Taco Palenque and Palenque Grill restaurants.

“I never dreamed it would get this big,” Ochoa told the Los Angeles Times soon after opening his first L.A. location. “If I had it to do all over again, I would build a bigger restaurant.” That small store on Alvarado is still bustling, as are the other earliest locales in Carson, Santa Ana and South Gate.

Taco Bell and Del Taco were founded in Southern California in the 1960s and vastly expanded the market for low-priced Mexican food. Rubio’s, Baja Fresh and La Salsa followed, showing off L.A.’s unending appetite for south of the border fare.

After Denny’s sold El Pollo Loco to focus on their Coco’s and Carrows restaurants, the company cycled through a series of private equity and investment firms before an initial public offering in 2014. Today, El Pollo Loco has nearly 500 locations in the Southwest and is celebrating their 50th anniversary with $19.75 family meal deals.

Executives told NRN that they are “in the process of carefully evaluating the proposal” from Biglari, though the paper also notes the “poison pill” provision that Biglari might use to acquire the 85% of the chain he does not yet own. Forbes once called Biglari a “Warren Buffett-wannabee” who “tend(s) toward the dramatic,” so it’s anybody’s guess how this will play out.