Company blames Hurricane Harvey and ‘limited awareness’ of brand
Fiesta Restaurant Group Inc. is closing six more of its Pollo Tropical restaurants, pulling out of the Texas market entirely, the company said Friday.
Dallas-based Fiesta, which also owns the fast-casual Taco Cabana concept, said it was closing two Pollo Tropical units in Houston and four in San Antonio, Texas. The company had first expanded Pollo Tropical, which launched in Florida, to Texas in 2014.
“The decision to close these restaurants was due to ongoing uncertainty in South Texas, including the effects of Hurricane Harvey and limited awareness of the Pollo Tropical brand,” the company said in a statement.
Fiesta had grown the Pollo Tropical brand to 209 units by the middle of 2016, but it closed 30 in April, involving restaurants in Georgia, Tennessee and North Texas, and 10 in November as the company struggled with declining same-store sales.
Two of the closed Pollo Tropical units in South Texas may be converted to the Taco Cabana brand, the company said.
Fiesta said the six now-closed Pollo Tropical restaurants in South Texas contributed about $6.7 million in restaurant sales in fiscal 2016.
Fiesta also provided an update on the recent effects of Hurricane Harvey in Texas and Hurricane Irma in Florida.
Rich Stockinger, Fiesta president and CEO, said the hurricanes cost the company “a short-term loss of business and some property damage.”
“We will be slightly delaying the start of our planned marketing build as our markets recover from these storms,” Stockinger said in a statement, “but expect to resume an impactful media plan before year-end.” He said Pollo Tropical had experienced “positive momentum” before Hurricane Irma. The company also plans to reintroduced broadcast advertising at Taco Cabana.
All but one of the 43 company-owned Taco Cabana restaurants that had closed in the Houston area during Hurricane Harvey have reopened, the company said. No serious injuries to employees were reported. About 319 operating days were lost as a result of Harvey through Sept. 14, the company said.
The company is still assessing the impact of Hurricane Irma. The company has 149 Pollo Tropicals in Florida and Georgia, and 119 had reopened by last Thursday.
“Some of the restaurants are currently serving a modified menu, operating limited hours or may be unable to offer both dine-in and drive-thru service,” the company said. Pollo Tropical had lost 719 operating days as a result of Hurricane Irma through Sept. 14.
“The company maintains comprehensive insurance coverage on all of its restaurants including property, flood and business interruption,” Fiesta said.
As of July 2, Fiesta owned and operated 153 Pollo Tropical units and 169 Taco Cabanas. The company franchised 32 Pollo Tropicals and seven Taco Cabanas.
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