News

Pollo Tropical, Taco Cabana shuttering units

December 20, 2018

Pollo Tropical is closing 14 units across Florida and Georgia, and Taco Cabana will shutter nine in Texas, according to Fiesta Restaurant Group, the brands' Dallas-based parent company. 

"In completing our strategic renewal plan with this comprehensive restaurant portfolio review, we will enter 2019 with a keen focus on building traffic, improving margins and rebranding Pollo Tropical for future expansion outside of South Florida," Fiesta President and CEO Richard Stockinger said in a company press release. "We believe that these steps will build the foundation for growth beginning in 2020."

The 14 closed Pollo Tropical restaurants contributed about $15.1 million in restaurant sales and $4.6 million in restaurant level pre-tax operating losses, including $2.0 million in depreciation expense, for the 11 months ended December 2, 2018. The nine closed Taco Cabana restaurants contributed $9.1 million in restaurant sales and $1.5 million in restaurant level pre-tax operating losses, including $700,000 in depreciation expense, for the eleven months ended Dec. 2, according to the company. 

As a result of these closures, the company expects to recognize non-cash impairment charges of about $12 million to $13 million and related lease and other charges of $3 million to $3.5 million during the fourth quarter of 2018. The actual amount of related lease and other charges will be based on the timing of restaurant closures.

"We continue to be optimistic about the future of Pollo Tropical and Taco Cabana and are pleased with recent progress made on several growth initiatives that we believe should have a meaningful impact on our business," Stockinger said. "New loyalty programs will be in place at both brands by the end of this year, we have rebranded and built an infrastructure to support Pollo Tropical catering and are in the process of doing the same at Taco Cabana, and third-party delivery is being piloted at select Pollo Tropical restaurants."

The company said it has offered nearly all employees impacted by the Florida and Texas closures the chance to work at nearby Pollo Tropical or Taco Cabana restaurant locations.

At the end of Q3, Fiesta operated 321 company restaurants (150 Pollo, 171 Taco), and had 30 franchised Pollo Tropical and eight Taco Cabana units.