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TheStreet Open House

Who Put the 'Crazy' in El Pollo Loco?

Stocks in this article: ARCOMCDDENNLOCODFCMGTHIDRIYUMPLKI

NEW YORK (TheStreet) -- The Crazy Chicken is looking more like The Crazy Investor.

El Pollo Loco  (LOCO) was founded by Juan Francisco Ochoa in the small town of Guasave in the State of Sinaloa in 1975. You can check a picture of the very first restaurant here. Today, there are many restaurants in five states, including Coahuila, Michoacan, Nuevo Leon, Sinaloa and Tamaulipas.

They're also in Mexico City, an urban area almost as populated as New York City.

Read MoreGreenberg: Getting Restaurant IPO Indigestion

These restaurants are a separate company. Maybe an investment banker should cross the Rio Bravo and convince them to file for an IPO with the symbol POLLO just like Arcos Dorados Holdings  (ARCO) , independent operator of McDonald's restaurants in Latin America, already did back in 2011.

There are two McDonald's:

  • One is currently the most profitable restaurant in the world with annual sales of $28.1 billion and annual profits of $5.6 billion
  • The other one is currently McDonald's (MCD) largest franchisee in the world with 94,000 employees, 2,070 restaurants and it serves over 4,300,000 customers daily in Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Puerto Rico, Peru, St. Croix, St. Thomas, Trinidad & Tobago, Uruguay and Venezuela.

There are two El Pollo Locos because Denny's  (DENN) bought all the restaurants within the United States of America in 1983. In 1999 the company was sold to a private equity firm and in 2005 the company was sold again to another private equity company.

 

When you are investing in LOCO you are only investing in the 399 restaurants currently open in Nevada, Arizona, Utah, Texas and California.

The current shareholders have been trying to make money for nine long years without success and they finally decided to sell their shares to individual investors in an IPO priced at $15 a share.

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