At Pollo Campero, Growth Is on the Menu

Carla Flores emigrated to Chicago from Honduras 27 years ago. Her husband, Eric Ruiz, moved from Guatemala. He never forgot his favorite chicken back home—and for that Flores is thankful. We're talking about Pollo Campero, the fried chicken chain that's the McDonald's (MCD) of Guatemala and making a dent in the U.S. fast-food market, with 53 stores in 15 states since its 2002 arrival. Flores and her daughter, Eugenia, drive a couple of miles to a Pollo Campero in Chicago three times a month just to get a taste. "It brings us back to Guatemala," says Eugenia.

Immigrants helped bring Pollo Campero to the U.S. Now, as part of the family-owned Guatemala City-based company's global goal of reaching 1,750 franchises over the next decade, the chain is expanding beyond its Spanish-speaking base in places such as Chicago, Los Angeles, and Washington. In the U.S. alone, Pollo Campero aims to grow tenfold, putting it on a collision course with established companies such as KFC (YUM) and Church's Chicken, as well as rival up-and-comers like El Pollo Loco and Pollo Tropical (TAST).

Industry analysts say Pollo Campero should benefit from having U.S. franchisees in key markets who are veteran restaurateurs. They include Amir Siddiqi, a former chief operating officer of CKE Restaurants (CKR), which owns Carl's Jr. and Hardee's. Siddiqi's new company, Adir Restaurants, opened the first U.S. Pollo Campero in Los Angeles; sales hit $1 million within 22 days. Lawrence Levy, whose Levy Restaurants runs food concessions in 73 sports arenas and entertainment facilities, also bought in. His seventh store, opening this fall, will replace a McDonald's (MCD) in Walt Disney World's (DIS) entertainment district near Orlando. The company is also testing a restaurant inside a Wal-Mart store in Bentonville, Ark.

The chain is assimilating in part because its food is, too. While the U.S. menu still includes fried plantainsand milky horchata drinks, it also lists dishes such as grilled chicken and mashed potatoes that are aimed at what Roberto Denegri, president of Campero USA, calls the crossover market. "Do I think they could have done this two decades ago? Probably not," says Blair Chancey, editor of food service magazine QSR. "But even in Middle America, tacos aren't foreign anymore."

Pollo Campero (the name means "country chicken") was born as an afterthought. Founder Juan Bautista Gutiérrez, who started out as a general merchandise retailer, opened his first restaurant in Guatemala City in 1971 as an outlet for his poultry farms. Now managed by two of his grandsons, the company and its franchisees operate 325 restaurants in 13 countries from Ecuador and Mexico to Spain, Bahrain, India, and China. Revenue hit $400 million last year, or almost a fifth of the $2.2 billion generated by the family's businesses, which range from flour milling and meat processing to lumber, construction, and hydroelectic power, says CEO Juan José Gutiérrez.

The restaurants, which feature drive-through windows and brightly colored booths, will look familiar to many Americans. Pollo Campero boasts bigger-than-average checks in the U.S. because a high percentage of its customers are families. Per-unit sales come to $1.7 million a year, nearly double KFC's $950,000, estimates Darren Tristano, an executive vice-president at Chicago-based restaurant consultancy Technomic.

Prices tend to be higher than at many fast-food competitors, too. A 12-piece chicken combo—served family-style on platters with stainless steel flatware—goes for $21.99. That costs more than four foot-long sandwiches at Subway. But the chain just added budget snacks to the menu, starting at 99 cents for a chicken tortilla, with the tagline: More Campero for less dinero. Even crossover diners will get that.

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