Following the June sale of its 109-unit El Torito chain, Irvine-based Prandium Inc. is developing a new Mexican/Southwestern quick-service restaurant plan for the El Torito Express restaurants it retained, and hopes eventually to launch it nationwide.
The new quick-service chain, which the company plans to rename, will compete with Mexican restaurants that stress healthful and fresh ingredients, such as Baja Fresh, Rubio’s Baja Grill, Wahoo’s Fish Tacos and La Salsa, said Rob Carl, a vice president at Prandium.
“The new concept will still have Mexican and Baja roots and flavors, but we will open it up and allow for other things to be there,” Carl said.
The company currently operates four El Torito Express units: in Palm Springs, Orange, downtown Los Angeles and Pasadena. The stores range from 1,800 to 2,700 square feet and seat from 40 to 80 people. The company is investing about $1 million to remodel the stores for the new concept, Carl said.
Prandium opened its first El Torito Express unit in July 1998 as an extension of its full-service El Torito chain. The quick-service express units have menus that blend Southwest and traditional Mexican ingredients. The new restaurant chain’s menu will go beyond tacos and burritos to include a wider assortment of food items with Caribbean and Latin influences, Carl said.
Prandium, which also owns and operates about 220 units divided among the Koo Koo Roo, Chi Chi’s and Hamburger Hamlet chains, sold the El Torito chain for $129.5 million in part to pay down long-term debt that had reached $237 million in the second quarter.
Prandium, formerly Koo Koo Roo Enterprises Inc., was created by the October 1998 acquisition by Family Restaurants Inc. of Irvine of Koo Koo Roo Inc. of Los Angeles. The company later was delisted from Nasdaq for failing to maintain the exchange’s minimum share price. Its stock now trades over the counter at about 1/8. Prandium has a market capitalization of about $23 million.
Prandium reported a net loss of $6.8 million on sales of $137.8 million for the second quarter ended June 25, compared with a net loss of $4.5 million on sales of $140.3 million for the prior second quarter. The first two quarters included sales for El Torito restaurants. Same-store sales, a key measure of performance in the restaurant industry, were down 1.3% for El Torito, down 3.8% for Koo Koo Roo and up 0.3% for Chi Chi’s in the second quarter. n
