Investors believe the Tex-Mex chicken chain could be the next Chipotle. The fast food chain has also posted impressive same-store sales.
In a recent earnings call with analysts and investors, El Pollo Loco CEO Steve Sather revealed the secret behind the chain's success.
"We are uniquely positioned in the restaurant sector by offering the high-quality food and dining experience you would expect from fast casual restaurants, while providing the speed, convenience and value typically of traditional quick service restaurants," Sather said.
His words highlight a huge change in American consumer behavior.
Fast-casual restaurants like Chipotle, Panera Bread, and Five Guys are hurting companies like McDonald's.
These chains promise to serve higher-quality ingredients than traditional fast food.
American consumers are increasingly watching their calorie counts, and want to know where their food comes from.
El Pollo Loco cooks whole chickens in-restaurant for hours, which is more appealing than a processed patty or nugget. The restaurant also offers a variety of fresh salsas and veggies.
The chain has positioned itself between fast-casual chains, like Chipotle, and casual restaurants like Applebee's or Olive Garden, according to a report by Moody's Investor Service.
"This strategy has allowed the company to take on a blend of QSR and fast casual attributes including quick counter service, drive-thru functionality, higher quality healthier food offerings and a balanced day-part between lunch and dinner with attractive price points," Moody's analysts write.