Hugo Wade claims he can taste the difference.
“El Pollo Loco tastes Mexican, KFC tastes American,” said the Guatemalan-born Wade as he stood outside a Pollo Campero restaurant. “This tastes Guatemalan. When I am here, I feel like I am in my country.”
It’s a common refrain. When the Guatemala City-based chicken restaurant’s first U.S. franchise opened in L.A.’s Pico-Union neighborhood in 2002, customers waited as long as seven hours to be served and the store remained open for 21 hours to meet demand for its fried chicken. Within five days, more than 30,000 customers came through its doors, and within two months it had done $1 million in sales about as much as the average quick-serve restaurant sells in a year.
That response has prompted Ron and Jerry Azarkman, the Israeli-born brothers whose L.A.-based ADIR Restaurants Corp. has the master franchise for Pollo Campero in the Western United States, to plan an aggressive rollout.
“The number of sites we open next year is limited only by how quickly we can find sites and build restaurants,” said Jose Cofino, president and chief operating officer.
In planning its expansion, ADIR Restaurants, which operates under the Pollo Campero name, is banking not only on expatriate Latin Americans with a taste for home, but on building new markets.
Pollo Campero is now trying to broaden its base to include black and Asian customers as it moves into neighborhoods already crowded with El Pollo Loco and KFC stores. It’s risky, but early indications suggest there could be room for a player like Pollo Campero (which means “country chicken”).
“The whole chicken category is somewhat saturated,” said Ron Paul, president of restaurant consulting firm Technomic Inc. “Anybody who is going to succeed is going to have to come up with something different or better. It would appear, based on their early success, that’s the way the pubic sees them.”
Started in 1971 in Guatemala City, Pollo Campero has roughly 200 stores in Latin America and Mexico, mostly concentrated in Guatemala and El Salvador. There are 18 stores in the U.S., including eight controlled by ADIR in L.A.
The 112,653 Guatemalans and 203,297 Salvadorans living in L.A. County as of the 2000 Census constituted the largest populations outside their respective countries.
The Azarkmans have a longstanding interest in cultivating the region’s Latin American population. The brothers also own ADIR International Export Ltd., which operates the La Curacao department store chain. The first La Curacao opened in L.A. in 1980, followed by locations in Panorama City, South Gate and Huntington Park. The company sells 97 percent of its merchandise on credit to 400,000 customers who carry a store charge card.
In 2004, Pollo Campero stores opened in Glendale, Compton, Long Beach and the Chesterfield Square area of L.A. This year, ADIR Restaurants plans four more local units. ADIR Restaurants will also begin sub-franchising this year, Cofino said.
As part of its expansion efforts, the chain is trying to build more stand-alone units with drive-throughs. New stores are more spacious and brightly lit, employing a muted version of the bright green, yellow and orange color scheme used in earlier stores. Wooden tables and chairs have replaced the plastic furniture in some quick-serve restaurants.
“We’re evolving right now,” said Sonia Carstensen, director of marketing, who said the chain needs at least 33 stores before it can afford a major ad push. “It’s not that we don’t believe in mass marketing. We’re not there yet.”
Pollo Campero injects its marinade into the chicken, a process it said makes the meat flavorful and juicy down to the bone. Pollo Campero does offer a rotisserie chicken, though it’s not what it’s known for.
El Pollo Loco’s chicken is citrus marinated and flame grilled and KFC is best known for its batter-fried chicken. The difference is not lost on Joselyn Segundo, born in the U.S. to a Salvadoran mother.
“In my mom’s country they have this and we’re used to it,” said Segundo, who makes five trips to Pollo Campero each month. “It’s the culture, for me.”
The privately held company will not disclose sales. Cofino said they are “substantially better” than the average quick-serve restaurant a claim backed by several analysts. Yum Brands Inc.’s KFC has sales volume of about $900,000 per store and has seen its year-over-year same-store sales decline 1 percent in the third quarter and 7 percent in November.
If Pollo Campero’s continued success with Latin American consumers seems assured, the response in other ethnic neighborhoods has also been strong. Cofino said that when Pollo Campero opened in November in Compton, about 4,000 people came through the doors on opening day.
The ability of an imported chicken chain to achieve crossover appeal is evidenced by El Pollo Loco, which has become so common it’s easy to forget it started in Mexico. When it opened its first U.S. location on Alvarado Street in 1980, it, too, had lines stretching around the block.
The chain, owned by American Securities Capital Partners LP, has concentrated 238 of its 324 restaurants in Los Angeles, Orange, Riverside and San Bernardino counties and plans to add more than 130 franchise-operated locations in the U.S. by 2009. Its average unit volume is $1.4 million per year for its company-operated stores, which it claims is the highest of any combined franchised- and company-operated chicken concept in the country. It posted same-store sales increases of 8.3 percent in the third quarter.
