14-05-2025
Pollo Tropical: How Authentic Restaurants Brands Boosted Its Revenue
Pollo Tropical is now privately-owned, has 145 locations, based predominantly in Florida, and is ... More mostly company-owned, not franchised. Pictured is its Weston, Fl. location.
When Alex Macedo, the CEO of Authentic Restaurants Brands, which owns P.J. Whelihan, Mambo Seafood and Tavern in the Square among several brands and his team, studied Pollo Tropical, a Caribbean flame-grilled chicken chain, he saw, 'massive untapped growth potential.' So it acquired Pollo Tropical from the Fiesta Restaurant Group (NASDAQ: FRG) in 2023 and took the chain private.
By using its data analysis and operational strategies, it boosted Pollo Tropical's average unit volume by 15% its first-year, post-acquisition. Pollo Tropical is centered in Florida where 127 of its 145 locations are situated with an additional 18 across Puerto Rico and the Bahamas.
Unlike most restaurant chains these days, where franchising dominates and often leads to quick growth, it owns 122 of its outlets with only 23 franchised with 16 of those in Puerto Rico. Indeed 90 of its stores are based in the Miami, Fort Lauderdale, West Palm Beach environs.
Macedo said Pollo Tropical possessed all the attributes that it pursues in an acquisition including 'high-volume and high-margins with strong regional relevance and long-term staying power.'
Although Authentic Restaurant Brands (ARB) is owned by NYC-based private equity company Garnett Station Partners, Macedo explains that ARB are 'restaurant operators, which sets us apart when we acquire new businesses' and don't have a quick buy then sell mentality. He acknowledges, however that 'at some point they will sell.'
Both Macedo and Dirk Montgomery, CEO of Pollo Tropical, are based in Miami, which Montgomery says provides them a 'tactile feel for all the restaurants because we're here.' Visiting outlets unannounced enables Montgomery to see in an 'unfiltered way, whether guests are taken care of, where the manager is focusing and whether his eyes are on the guest.'
Its 2 Strategies To Boost Revenue
To boost revenue, Macedo explained that its two main strategies were to extend its hours and simplify its menu. Since drive-thru purchases constitute 50% of its sales, a strong portion of its revenue stems from dining during peak times. But half the orders were customized, which slowed down the line and often led to customers driving away, unwilling to wait.
In addition, because of Covid most Pollo Tropical outlets reduced their hours and closed at 10:30 p.m. and kept those hours post-Covid but its new ownership extended them until midnight. Macedo said 'the demand later in the evening contributed to boosting revenue to approximately a 3% increase in same-store sales.'
Simplify, Simplify
Its data engineers analyzed the menu and ordering patterns, identified top selling menu items, and simplified its' offerings. The streamlined menu contributed to speeding up the lines, amounting to a 15-second improvement in service times, which Macedo says, 'had a huge impact given how high-volume our locations are.'
Why does that 15-second speed-up make such a difference? Macedo says when most people see 12 cars on line, they drive out quickly, so speeding up the line promotes more business and a superior customer experience.
It also launched a whole new line of chicken sandwiches and a TV campaign promoting its $19.95 family chicken dinner, consisting of 8 pieces of chicken, rice and 2 sides, that would cost $25 to $27 at other chicken chains, Macedo notes. 'It's a huge value driver,' he concludes.
Leave The Culture Alone
Asked what it did to change Pollo Tropical's culture, Macedo replied that it 'wasn't looking to change the culture, as that is what drew us to them in the first place. We bring operational expertise, resources and proven best practices to help teams execute at even a higher level.'
Hence, CEO Montgomery says the menu revolves around two main items: freshly grilled chicken and black beans and rice. The quarter or half grilled chicken is marinated for 24-hours in citrus juices and spices, then flame-grilled and the black beans and rice personify a classic Latino dish.
Montgomery adds that while many chains offer fried chicken dishes, which aren't healthy, its chicken is lightly charred and 'aligns well with today's more health-conscious consumer seeking grilled over fried proteins.'
On Yelp some of Pollo Tropical's clientele in Miami, Fl. echoed Montgomery's sentiments. Stephanie from Miami wrote that it offers a 'semi-healthier version of fast food than getting your usual burger or fried chicken nuggets. Their flavors seem to be on point.' And she noted that she has never waited more than 5 minutes through the drive-thru.
Kevin from Manchester, Ct. described dining at Pollo Tropical in Miami as a 'Cuban Boston Market. They serve up chicken, pork and other meats with Cuban sandwiches and rice and beans. And the price was very cheap, a meal with a quarter chicken cost 11 bucks.'
Despite the growth in revenue, CEO Montgomery says don't expect to see them opening new stores in 2025. 'We plan to be very selective,' he states, 'and open a small number of high-sales volume locations beginning in late 2026 or 2027. That will contribute to consistent revenue growth over the next few years.'
Why such slow growth? Macedo says that first it wanted to improve the guest experience, sales and bottom line, then they'll turn to opening new locations.
Staying within Florida, Macedo adds, helps with supply chain issues, staffing, and being in relative proximity to most outlets.
In fact, Macedo says, 'We're undeveloped in Florida,' suggesting that are many inland and coastal locations, north of Miami haven't been tapped yet. He admits that years down the road they may consider contiguous states beyond Florida's border. But that's long-term.
