Less than a year after opening in Kyle and San Marcos, the parent company that owns the Pollo Tropical brand has shuttered the two locations.
The move comes after the Fiesta Restaurant Group, Inc. announced the closure of 28 other restaurants in Austin, north Texas and in Nashville, Tenn., according to a news release on the groups’ website.
FRGI, which is the parent company of Pollo Tropical and Taco Cabana, said the plan to close the stores is part of its strategic renewal plan which is designed to drive long term creation.
“As part of the plan, the company intends to relaunch the Pollo Tropical brand in September of this year and to relaunch the Taco Cabana brand late in the year once priority initiatives under the renewal plan are achieved,” according to the release.
Initiatives include returning to the founding principles that “made each brand iconic,” improving ingredients, and delivering “exceptional” hospitality.
Other methods include reducing costs through the organization, while also reducing broadcast media where possible and optimizing “post-launch advertising support.”
According to the release, preliminary first quarter 2017 sales results, which ended April 2, showed a 6.7 drop in restaurant sales at Pollo Tropical and a 4.5 percent drop at Taco Cabana.
Industrywide headwinds, prevalent in Florida and Texas, along with the impact of sales cannibalization, continued to negatively impact performance, the release said.
FRGI estimated the 30 total closed stores contributed $27 million of restaurant sales and $14.6 million of pre-tax operating losses.
That includes close to $5 million of depreciating expense and $1.8 million of pre-opening costs.
“Fiesta’s recent growth initiatives diverted resources from our core markets and some amount of renewal is required to restore momentum in these markets,” said Richard Stockinger, Fiesta President and Chief Executive Officer in the release. “While the decision to close restaurants is never easy, we believe it is vital to focus the company’s resources and efforts on markets and locations that have proven successful for our brands.”
Stockinger added the company will retain 19 Pollo Tropical restaurants in Atlanta and in South Texas to provide a “low risk opportunity to refine and test our long-term growth potential.”
“We will execute our plan with measured urgency, and I look forward to reporting our progress and success as the plan is implemented,” Stockinger said.
According to the release, the company will offer positions at nearby restaurants to employees impacted by the closures. It’s unknown how many employees were affected by the move.
