More Bad News For the Struggling El Pollo Loco Brand

No longer just a “sign of the times,” El Pollo Loco‘s future is looking rather grim as of late. Just last week, the company laid off five people from their corporate headquarters, citing a “strategic internal decision to cut expenses within the company.” Among those let go, according to the OC Register, was the brand’s vice president of company communications.

These layoffs come in the wake of the company’s net loss of $4.7 million for a thirteen week period, reported in May, and a $39.5 million net loss for 2010. The company was in danger of defaulting on an $11 million loan earlier this summer, but  announced in April that it had every intention to pay off the loan “in full.”

In addition, 9 franchised El Pollo Loco locations are up for sale, most scattered around Los Angeles and Ventura counties. This comes on the heels of a fast-food industry report released today, showing El Pollo Loco as one of the worst performing fast food chains on the list. The brand experienced a -7.18% change in systemwide sales, underperformed only by the likes of Boston Market, Pizza Hut and fellow straggler Long John Silver’s.

Why is El Pollo Loco struggling?

It seems despite the brand’s continual product launches (note: Brand Nuevos Burritos), they just can’t seem to get a grasp on the type of image they want to portray. El Pollo Loco provides some great healthy options, but their branding seems muddled by a long-standing transformation period that never truly materialized.

Everyone has their theory, but why do you think El Pollo Loco is struggling so much?