UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 2930, ~~2010~~2011

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 333-115644

EPL Intermediate, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-4092105
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

3535 Harbor Blvd., Suite 100
Costa Mesa, California	92626
(Address of principal executive offices)	(Zip Code)

(714) 599-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ o No ¨ o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of ~~November~~ 12May 11, ~~2010~~2011, 100 shares of the registrant’s common stock were outstanding.

TABLE OF CONTENTS

Item		Page
	PART I – FINANCIAL INFORMATION
1.	Condensed Consolidated Financial Statements (Unaudited)	3
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1917
3.	Quantitative and Qualitative Disclosures About Market Risk	3127
4.	Controls and Procedures	3127
	PART II – OTHER INFORMATION
1.	Legal Proceedings	3228
1A.	Risk Factors	3228
5.	Other Information	3328
6.	Exhibits	3429

Item 1. Financial Statements

EPL INTERMEDIATE, INC.

(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands)

	DECEMBER 30,		SEPTEMBER 29,
	DECEMBER 29,		MARCH 30,
	2009		2010
	2010		2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	115,~~277~~487	$	1210,~~059~~317
Restricted cash		131		131
Accounts and other receivables-net		93,~~607~~914		34,~~708~~142
Inventories		1,~~606~~496		1,~~447~~440
Prepaid expenses and other current assets		52,~~262~~051		43,~~716~~508
Deferred income taxes		327		327
Total current assets		13,079		19,538
Total current assets		28,210		22,388
PROPERTY OWNED—Net		67,441		65,721
PROPERTY OWNED—Net		77,344		73,067
PROPERTY HELD UNDER CAPITAL LEASES—Net		402		380
PROPERTY HELD UNDER CAPITAL LEASES—Net		524		424
GOODWILL		249,924		249,924
DOMESTIC TRADEMARKS		9161,~~788~~888		9161,~~788~~888
OTHER INTANGIBLE ASSETS—Net		1,~~900~~511		1,~~587~~448
OTHER ASSETS		129,~~200~~325		108,~~322~~497
TOTAL ASSETS	$	~~461~~403,~~890~~570	$	~~449~~407,~~500~~396

See notes to condensed consolidated financial statements (unaudited).

(continued)

EPL INTERMEDIATE, INC.

(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands, except share data)

	DECEMBER 30,			SEPTEMBER 29,
	December 29,			March 30,
	2009			2010
	2010			2011
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Current portion of obligations under capital leases	$	341		$	206
Current portion of PIK Notes (2014 Notes)	$	10,600		$	10,600
Current portion of PIK Notes (2014 Notes)		-			10,600
Current portion of obligations under capital leases		205			204
Accounts payable		2011,~~607~~316			11,~~628~~686
Accrued salaries		4,~~289~~535			23,~~732~~230
Accrued vacation		21,~~010~~993			2,~~021~~134
Accrued insurance		12,~~545~~460			2,~~047~~516
Accrued income taxes payable		1524			3521
Accrued interest		3,~~432~~285			11,~~460~~402
Accrued advertising		96179			~~135~~217
Other accrued expenses and current liabilities		5,239			5,845
Deferred income taxes		159			159
Total current liabilities		37,574			46,709
Other accrued expenses and current liabilities		5,423			5,786
Total current liabilities		40,179			47,955
NONCURRENT LIABILITIES:
Senior secured notes (2012 Notes)		~~130~~131,~~407~~042			~~130~~131,~~878~~214
Senior unsecured notes payable (2013 Notes)		106,~~347~~515			106,~~473~~558
PIK Notes (2014 Notes)-less current portion		2919,~~342~~199			1819,~~971~~199
Obligations under capital leases—less current portion		1,~~763~~558			1,~~610~~504
Deferred income taxes		3726,~~776~~864			3827,~~743~~932
Other intangible liabilities—net		3,~~998~~282			3,~~431~~151
Other noncurrent liabilities		10,~~673~~606			10,~~721~~339
Total noncurrent liabilities		~~320~~299,~~306~~066			~~310~~299,~~827~~897
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDER'S EQUITY
Common stock, $.01 par value—100 shares authorized; 100 shares issued and outstanding		-			-
Additional paid-in-capital		199,~~733~~526			~~200~~199,~~173~~464
Accumulated deficit		(95135,~~723~~201	)		(~~108~~139,~~209~~920	)
Total stockholder's equity		~~104~~64,~~010~~325			9159,~~964~~544
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	~~461~~403,~~890~~570		$	~~449~~407,~~500~~396

See notes to condensed consolidated financial statements (unaudited).

(concluded)

EPL INTERMEDIATE, INC.

(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in thousands)

	13 Weeks Ended						~~39 Weeks Ended~~
	September 30,			September 29,			September 30,			September 29,
	March 31,			March 30,
	2009			2010			2009			2010
	2010			2011
OPERATING REVENUE:
Restaurant revenue	$	63,~~740~~418		$	6362,~~756~~442		$	~~197,444~~		$	~~193,686~~
Franchise revenue		4,~~764~~574			4,~~457~~420			~~14,357~~			~~13,754~~
Total operating revenue		6867,~~504~~992			6866,~~213~~862			~~211,801~~			~~207,440~~
OPERATING EXPENSES:
Product cost		2019,~~587~~778			19,~~919~~082			~~63,747~~			~~60,465~~
Payroll and benefits		1617,~~621~~529			17,~~359~~558			~~52,391~~			~~52,266~~
Depreciation and amortization		32,~~015~~581			2,~~755~~437			~~8,651~~			~~7,949~~
Other operating expenses		23,~~544~~751			2322,~~285~~055			~~74,090~~			~~70,271~~
Total operating expenses		63,~~767~~639			6361,~~318~~132			~~198,879~~			~~190,951~~
OPERATING INCOME		4,~~737~~353			45,~~895~~730			~~12,922~~			~~16,489~~
INTEREST EXPENSE—Net		9,~~075~~232			9,~~506~~355			~~23,501~~			~~27,981~~
OTHER EXPENSE		-			-			443			-
LOSS BEFORE PROVISION FOR INCOME TAXES		(4,879	)		(3,625	)
OTHER INCOME		-			-			(452	)		-
PROVISION FOR INCOME TAXES		745			1,094
LOSS BEFORE PROVISION FOR INCOME TAXES		(4,338	)		(4,611	)		(10,570	)		(11,492	)
NET LOSS	$	(5,624	)	$	(4,719	)
PROVISION FOR INCOME TAXES		306			221			19,848			994
NET LOSS	$	(4,644	)	$	(4,832	)	$	(30,418	)	$	(12,486	)

See notes to condensed consolidated financial statements (unaudited).

EPL INTERMEDIATE, INC.

(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	39 Weeks Ended
	September 30,			September 29,
	2009			2010
CASH FLOWS - OPERATING ACTIVITIES:
Net loss	$	(30,418	)	$	(12,486	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		8,651			7,949
Stock-based compensation expense		390			563
Interest accretion		3,336			826
Loss on disposal of assets		-			274
Gain on repurchase of bonds		(452	)		-
Asset impairment		3,200			1,490
Closed store reserve		-			1,147
Amortization of deferred financing costs		2,799			2,230
Amortization of favorable / unfavorable leases		(142	)		(254	)
Deferred income taxes		19,173			967
Change in fair value of interest rate swap		231			-
Changes in operating assets and liabilities:
Accounts and other receivables-net		(599	)		5,899
Inventories		125			159
Prepaid expenses and other current assets		(1,000	)		546
Income taxes receivable / payable		636			20
Other long term assets		(141	)		(361	)
Accounts payable		2,606			(9,037	)
Accrued salaries and vacation		(595	)		(1,546	)
Accrued insurance		(167	)		502
Other accrued expenses and current and noncurrent liabilities		5,739			7,575
Net cash provided by operating activities		13,372			6,463
CASH FLOWS -INVESTING ACTIVITIES
Purchase of property		(7,449	)		(5,273	)
Proceeds from asset disposition		-			3
Restricted cash		(131	)		-
Net cash used in investing activities		(7,580	)		(5,270	)
CASH FLOWS - FINANCING ACTIVITIES
Repurchase of common stock		(881	)		(123	)
Payment of obligations under capital leases		(475	)		(288	)
Proceeds from borrowings		133,850			-
Payments on debt		(108,603	)		-
Repurchase of notes		(1,470	)		-
Deferred financing costs		(9,238	)		-
Net cash provided by (used in) financing activities		13,183			(411	)

(Amounts in thousands)

	13 Weeks Ended

	March 31,			March 30,
	2010			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,624	)	$	(4,719	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2,581			2,437
Stock-based compensation expense		193			(48	)
Interest accretion		196			214
Loss on disposal of assets		84			35
Asset impairment		16			46
Closed store reserve		910			(15	)
Amortization of deferred financing costs		692			829
Amortization of favorable / unfavorable leases		(79	)		(68	)
Deferred income taxes		718			1,068
Changes in operating assets and liabilities:
Accounts and other receivables-net		3,459			(228	)
Inventories		6			56
Prepaid expenses and other current assets		(356	)		(1,457	)
Income taxes receivable / payable		46			(3	)
Other assets		19			(4	)
Accounts payable		(7,800	)		270
Accrued salaries and vacation		(1,533	)		(1,164	)
Accrued insurance		381			56
Other accrued expenses and current and noncurrent liabilities		7,488			8,266
Net cash provided by operating activities		1,397			5,571

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property		(1,679	)		(672	)
Net cash used in investing activities		(1,679	)		(672	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock		-			(14	)
Payment of obligations under capital leases		(120	)		(55	)
Net cash used in financing activities		(120	)		(69	)

See notes to condensed consolidated financial statements (unaudited).

(continued)

EPL INTERMEDIATE, INC.

(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	39 Weeks Ended
	September 30,		September 29,
	2009		2010
INCREASE IN CASH AND CASH EQUIVALENTS	$	18,975	$	782
CASH AND CASH EQUIVALENTS—
Beginning of period		1,076		11,277
CASH AND CASH EQUIVALENTS—
End of period	$	20,051	$	12,059
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION—Cash paid during the period for:
Interest	$	9,008	$	16,900
Income taxes, net	$	38	$	7
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
Unpaid purchases of property and equipment	$	356	$	87

(Amounts in thousands)

	13 Weeks Ended

	March 31,			March 30,
	2010			2011
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	$	(402	)	$	4,830

CASH AND CASH EQUIVALENTS—
Beginning of period		11,277			5,487

CASH AND CASH EQUIVALENTS—
End of period	$	10,875		$	10,317

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION—Cash paid during the period for:
Interest	$	124		$	179

Income taxes paid (refunded), net	$	(20	)	$	29

SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
Unpaid purchases of property and equipment	$	681		$	259

See notes to the condensed consolidated financial statements (unaudited).

(concluded)

EPL INTERMEDIATE, INC.

(A Wholly-Owned Subsidiary of El Pollo Loco Holdings, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. EPL Intermediate, Inc. (“Intermediate”) and its wholly owned subsidiary El Pollo Loco, Inc. (“EPL” and jointly with Intermediate, the “Company,”) prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America for interim financial information and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.

The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair presentation of its financial position and results of operations for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year or any other future periods.

The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 3029, ~~2009~~2010 (File No. 333-115644) as filed with the Securities and Exchange Commission (the “Commission”) on March 3025, ~~2010~~ 2011.

Intermediate is a wholly-owned subsidiary of El Pollo Loco Holdings, Inc. (“Holdings”), which is a wholly owned indirect subsidiary of Chicken Acquisition Corp. (“CAC”) which is 99% owned by Trimaran Pollo Partners, LLC (the “LLC”). The Company’s activities are performed principally through Intermediate’s wholly-owned subsidiary, EPL, which develops, franchises, licenses, and operates quick-service restaurants under the name El Pollo Loco®.

The Company uses a 52-53 week fiscal year ending on the last Wednesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. Fiscal year ~~2009~~2010, which ended December 3029, ~~2009~~2010, was a 52-week fiscal year. Fiscal year ~~2010~~2011, which will end December 29 28, ~~2010~~2011, is also a 52-week year.

2. Cash

Concentration of credit risk

The Company maintains all of its cash at one commercial bank. Balances on deposit are insured by the Federal Deposit Insurance Corporation (FDIC) up to specified limits. The Company’s cash balances in excess of the FDIC limits are uninsured.

Liquidity

The Company’s principal liquidity requirements are to service its debt and meet capital expenditure needs. At ~~September~~March 2930, ~~2010~~2011, the Company’s total debt including obligations under capital leases was $~~268~~269.73 million. ~~Assuming~~In ~~the~~May ~~Company~~2011, ~~does~~Intermediate ~~not~~is ~~repurchase~~required ~~any~~to mandatorily redeem $10,144,000 principal amount of ~~the~~its ~~outstanding~~ 2014 Notes (as defined below), inat ~~May 2011 Intermediate is required to make~~ a ~~mandatory~~ redemption price of a104.5% ~~portion~~ of ~~its~~the ~~2014~~accreted ~~Notes~~value at(as andefined ~~estimated~~in ~~cost~~the ~~of approximately~~indenture ~~$10.6~~for ~~million~~the 2014 Notes), along with the interest payment that will then be due. This redemption payment is currently estimated to be approximately $10.6 million, plus the interest. The Company’s ability to make payments on its indebtedness and to fund planned capital expenditures will depend on available cash and its ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. Based on current operations, the Company believes that its cash flow from operations, available cash of $1210.13 million at ~~September~~March 2930, ~~2010~~2011, available borrowings under the credit facility (which availability was approximately $6.1 million at ~~September~~ 29March 30, ~~2010~~2011), and funds from CAC will be adequate to meet the Company’s liquidity needs for the next 12 months. Under the covenants governing the Company’s outstanding Notes, EPL is limited on the amount that it can distribute to Intermediate, including amounts that Intermediate could use to fund its debt service. As of the date of this filing, the Company is beginning to explore alternatives it may have to opportunistically refinance its existing debt from a variety of sources. Such refinancing may not be completed for a number of factors. The Company’'s results of operations as well as current economic and constrained liquidity conditions could make it more difficult or costly for the Company to obtain such alternative financing or to obtain additional debt financing or to refinance its existing debt ~~when~~, itin ~~becomes~~the ~~necessary~~near ~~(assuming~~term ~~such~~or ~~financing~~when isit ~~then~~becomes ~~available to the Company)~~necessary, orand could otherwise make alternative sources of liquidity or financing costly or unavailable. The Company cannot provide assurance that it will be able to refinance any of its indebtedness, if desirable or necessary, on commercially reasonable terms or at all.

3. Restricted cash

As of December 3029, ~~2009~~2010 and ~~September~~March 2930, ~~2010~~2011, the Company had recorded $0.1 million as restricted cash on the accompanying condensed consolidated balance ~~sheet~~ sheets. This amount serves as collateral to ~~Bank~~one ofcommercial ~~America~~bank for ~~the Company’s Bank of America~~ company credit cards ~~as of September 29, 2010 as the Company transferred its banking relationship from Bank of America to another commercial bank~~.

4. Other Intangible Assets and Liabilities

Other intangible assets and liabilities consist of the following (in thousands):

December 30, 2009

September 29, 2010

December 29, 2010

March 30, 2011

~~Gross~~

Gross

~~Net~~

Net

~~Gross~~

Gross

~~Net~~

Net

~~Carrying~~

Carrying

~~Accumulated~~

Accumulated

~~Carrying~~

Carrying

~~Carrying~~

Carrying

~~Accumulated~~

Accumulated

~~Carrying~~

Carrying

~~Amount~~

Amount

~~Amortization~~

Amortization

~~Amount~~

Amount

~~Amount~~

Amount

~~Amortization~~

Amortization

~~Amount~~

Amount

Favorable leasehold interest

5,862

(34,~~962~~351

)

1,~~900~~511

5,862

(4,~~275~~414

)

1,~~587~~448

Unfavorable leasehold interest liability

(9,156

)

5,~~158~~874

(3,~~998~~282

)

(9,156

)

56,~~725~~005

(3,~~431~~151

)

Favorable leasehold interest represents the asset in excess of the approximate fair market value of the leases. The amount is being amortized over the approximate average life of the leases and is shown as other intangible assets-net on the accompanying condensed consolidated balance sheets.

Unfavorable leasehold interest liability represents the liability in excess of the approximate fair market value of the leases. The amount is being amortized over the approximate average life of the leases. This amount is shown as other intangible liabilities-net on the accompanying condensed consolidated balance sheets. Net amortization for other intangible assets and liabilities was $~~201~~79,000 for the 3913-week period ended ~~September~~March 3031, ~~2009~~2010 and $~~254~~68,000 for the 39 13-week period ended ~~September~~March 2930, ~~2010~~2011.

The estimated net amortization credits for the Company’s favorable and unfavorable leasehold interests for each of the five succeeding fiscal years is as follows (in thousands):

Year Ending December
2010 (September 30 – December 29)	$	(73	)
2011 (March 31 – December 28)	$	(222)
2011		(290	)
2012		(275)
2012		(275	)
2013		(213)
2013		(213	)
2014		(227)
2014		(227	)
2015		(156)
2015		(156	)
2016		(98)

5. Asset Impairment

The Company reviews its long-lived assets for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain assets may not be recoverable. If the Company concludes that the carrying value of certain assets will not be recovered based on expected undiscounted future cash flows, an impairment write-down is recorded to reduce the assets to their estimated fair value. No Asmaterial ~~a result~~impairment ofcharges ~~this~~were ~~review, the Company~~ recorded anin ~~impairment~~the ~~charge~~thirteen ~~of approximately~~weeks ~~$2.0~~ended ~~million in~~ March ~~2009~~30, for two under-performing company-operated stores that continue to be operated and $1.2 million in September 2009 for four under-performing company-operated stores of which three continue to be operated. The Company recorded an impairment charge of approximately $1.3 million in June 2010 ~~for one under-performing company-operated store that continues to be operated~~ and ~~$0.2 million~~ in ~~September~~ ~~2010~~the ~~for~~thirteen ~~one~~weeks ~~under-performing~~ended ~~company~~March ~~store~~30, ~~that continues to be operated~~2011. ~~These impairment charges are included in other operating expenses in the accompanying condensed consolidated statements of operations.~~

6. Fair Value Measurement

The Company’s financial assets and liabilities, which include financial instruments as defined by Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures, to Certain Financial Instruments, include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and certain accrued expenses, long-term debt and derivatives. The Company believes the carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and certain accrued expenses approximate fair value due to their short term maturities. Long term debt is considered by the Company to be representative of current market rates. Accordingly, the Company estimates that the recorded amounts approximate fair market value.

7. Stock-Based Compensation

As of ~~September~~ 29March 30, ~~2010~~2011, options to purchase ~~277~~124,~~633~~791 shares of common stock of CAC were outstanding, including 5819,~~606~~224 options that were fully vested. The remaining options partially vest upon the Company’s attaining annual financial or other goals, with the remaining unvested portion vesting on the sixth or seventh anniversary of the grant date or vesting 100% upon the occurrence of an initial public offering of at least $50 million or a change in control of CAC. All options were granted with an exercise price equal to the fair value of the common stock on the date of grant. A net compensation expense credit of $48,000 was recorded in the thirteen weeks ended March 30, 2011 primarily due to forfeitures on unvested stock options for a certain executive who is no longer with the Company.

Changes in stock options for the ~~thirty-nine~~thirteen weeks ended ~~September~~March 2930, ~~2010~~2011 are as follows:

						Weighted-
	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value (in thousands)
						Average
Outstanding—December 29, 2010		186,420		$	65.73
						Remaining
Grants		-		$	-
				Weighted- Average		Contractual Life		Aggregate Intrinsic
Exercised		(1,181	)	$	7.56
	Shares			Exercise Price		(in Years)		Value
Canceled		(60,448	)	$
Outstanding—December 30, 2009		289,217		$	71.22
Outstanding—March 30, 2011		124,791		$	79.97		5.1		$	299
Grants (weighted-average fair value of $20.21 per share)		2,225		$	46.00
Vested and expected to vest – March 30, 2011		99,545		$	79.97		5.1		$	299
Exercised		(7,134	)	$	3.84
Exercisable – March 30, 2011		19,224		$	11.43		1.7		$	299
Canceled		(6,675	)	$
Outstanding—September 29, 2010		277,633		$	72.53		4.8		$	2,125,054
Vested and expected to vest – September 29, 2010		274,246		$	72.53		4.8		$	2,125,054
Exercisable – September 29, 2010		58,606		$	9.74		1.5		$	2,125,054

The intrinsic value is calculated as the difference between the estimated market value as of ~~September~~March 2930, ~~2010~~2011 and the exercise price of options that are outstanding and exercisable.

As of ~~September~~ 29March 30, ~~2010~~2011, there was total unrecognized compensation expense of $21.2 5 million related to unvested stock options, which the Company expects to recognize over a weighted-average period of 2.78 years or earlier in the event of an initial public offering of our common stock or change in control.

In ~~accordance~~ ~~with~~October 2008, the Board of Directors of CAC adopted a Restricted Stock Plan ~~adopted~~pursuant into ~~2008~~which up to an aggregate of 5,000 ~~the~~shares ~~Company~~of ~~granted 404~~CAC common stock may be awarded to independent directors as compensation for their services. In 2010, an independent director was awarded 598 shares inof ~~2009~~CAC restricted stock pursuant to the CAC 2008 Restricted Stock Plan for Independent Directors of which 50% vested inon ~~January~~the ~~2010~~first anniversary of the grant date (during the first quarter of 2011) and ~~granted~~the ~~598~~remainder ~~shares~~will in vest on the second anniversary of the grant date (during the first quarter of 2012). In 2010, ~~none~~the same independent director was also awarded 1,000 shares of CAC common stock which ~~have~~fully vested on the grant date. In 2009, an independent director was awarded 404 shares of CAC restricted stock pursuant to the CAC 2008 Restricted Stock Plan for Independent Directors. One-half of these shares vested in January 2010 and the balance vested in January 2011. The restricted stock expense recorded in the ~~thirty-nine~~thirteen weeks ended ~~September~~March 2931, 2010 and in the thirteen weeks ended March 30, 2011 related to the ~~these~~vesting ~~vested~~of shares was immaterial.

1,000 shares of common stock of CAC were issued to a director during the second quarter of 2010. In accordance with this issuance, compensation expense of $46,000 was recognized during the second quarter of 2010.

8. Commitments and Contingencies

Legal Matters

~~As previously~~On ~~disclosed~~May in30, ~~earlier~~2008, ~~reports~~Jeannette Delgado, a former Assistant Manager filed ~~with~~a ~~the~~purported ~~Securities~~class ~~and~~action ~~Exchange Commission,~~on ~~the~~behalf ~~Company~~of ~~entered~~all ~~into~~hourly an(i.e. ~~agreement~~non-exempt) employees of EPL in ~~the~~state ~~fourth~~court ~~quarter~~in Los Angeles County alleging violations of ~~2009~~ certain California labor laws and the California Business and Professions Code including failure to ~~settle~~pay ~~for~~overtime, $8failure to provide meal periods and rest periods and unfair business practices.0 ~~million~~By astatute, the purported class ~~action~~extends ~~lawsuit~~back ~~brought~~four byyears, ~~former managers~~to ~~Haroldo~~May ~~Elias~~30, ~~Marco~~2004. ~~Ramirez~~Plaintiff’s requested remedies include compensatory and ~~Javier~~punitive ~~Rivera~~damages, injunctive relief, disgorgement of profits and reasonable attorneys’ fees and costs. The ~~Company~~parties ~~funded~~agreed ~~the settlement~~to onsettle ~~January~~this ~~14,~~matter ~~2010~~for approximately $1.9 million and ~~the~~executed ~~Superior~~a ~~Court~~settlement ofagreement. ~~the~~This ~~State~~amount ~~of California,~~was ~~County~~accrued offor ~~Los~~in ~~Angeles,~~the ~~granted~~prior ~~final~~year ~~approval~~and ofis included in the ~~class~~accompanying ~~wide settlement~~condensed ~~and~~consolidated ~~entered~~balance ~~Final~~sheets ~~Judgment~~in ataccounts apayable ~~hearing~~as onof ~~April~~March 2030, ~~2010~~ 2011. ~~This~~The ~~settlement~~Court ~~also~~issued ~~included~~an ~~and~~order ~~settled~~granting final approval of the ~~previously disclosed~~settlement ~~purported~~on ~~class~~February ~~action~~16, ~~complaint~~2011, ~~filed~~and bythe ~~Salvador Amezcua. Total~~settlement ~~payments~~is ~~related~~expected to ~~this~~be ~~case~~funded ~~were~~no $8later than May 20, 2011.~~7 million.~~

In April 2007, Dora Santana filed a purported class action in state court in Los Angeles County on behalf of all “Assistant Shift Managers.” Plaintiff alleges wage and hour violations including working off the clock, failure to pay overtime, and meal break violations on behalf of the purported class, currently defined as all Assistant Managers from April 2003 to present. The parties have agreed to settle this matter for approximately $0.8 million and have executed a Settlement Agreement. This amount was fully accrued for in the prior year and is included in the accompanying condensed consolidated balance sheets in accounts payable as of September 29, 2010. The Court granted final approval of this settlement in August 2010 and the settlement was funded on October 25, 2010.

On May 30, 2008, Jeannette Delgado, a former Assistant Manager filed a purported class action on behalf of all hourly (i.e. non-exempt) employees of EPL in state court in Los Angeles County alleging violations of certain California labor laws and the California Business and Professions Code including failure to pay overtime, failure to provide meal periods and rest periods and unfair business practices. By statute, the purported class extends back four years, to May 30, 2004. Plaintiff’s requested remedies include compensatory and punitive damages, injunctive relief, disgorgement of profits and reasonable attorneys’ fees and costs. The parties have agreed to settle this matter for approximately $1.9 million and have executed a Settlement Agreement. This amount was accrued for in the prior year and is included in the accompanying condensed consolidated balance sheets in accounts payable as of September 29, 2010. On October 28, 2010, the Judge ruled that the settlement was fair and granted final approval upon successful notice to additional class members and a determination of the fees due to the settlement administrator. A final approval hearing is set for January 7, 2011.

Martin Penaloza, a former Assistant Manager, filed a purported class action on May 26, 2009 in Superior Court in Orange County, California. The claims, requested remedies, and potential class in this case overlap those in the Delgado lawsuit described above and will be included in that settlement.

In September 2008, American International Specialty Lines Insurance Company (AISLIC) from whom the Company acquired excess insurance coverage, filed an action for declaratory judgment seeking to have the court determine that it is not required to indemnify EPL for any amounts awarded against it (or paid in settlement) in connection’s with the previously settled EPL-Mexico v. EPL-USA trademark litigation. In July 2010, the parties agreed to settle this matter for payment to the Company of $75,000 and a waiver of fees and costs by AISLIC. The Company received payment from AISLIC on July 28, 2010.

The Company is also involved in various other claims and legal actions that arise in the ordinary course of business. We do not believe that the ultimate resolution of these other actions will have a material adverse effect on our financial position, results of operations, liquidity and capital resources. A significant increase in the number of claims or an increase in amounts owing under successful claims could materially adversely affect our business, financial condition, results of operation and cash flows.

Purchasing Commitments

The Company has long-term beverage supply agreements with certain major beverage vendors. Pursuant to the terms of these arrangements, marketing rebates are provided to the Company and its franchisees from the beverage vendors based upon the dollar volume of purchases for system-wide restaurants which will vary according to their demand for beverage syrup and fluctuations in the market rates for beverage syrup. These contracts have terms extending into late 2011 and 2012 with an estimated Company obligation totaling $34.85 million.

InAt March ~~2010~~ 30, ~~EPL~~2011 ~~executed~~our atotal ~~chicken~~commitment ~~supply contract with a vendor that has pricing relatively flat compared~~ to ~~the~~purchase ~~prior year’s expired contract. This agreement has a balance of approximately 17 months remaining for~~ chicken ~~purchases~~ ~~totaling~~was approximately $1526.2 million. ~~Additionally, EPL has a balance of approximately 5 months remaining on contracts with certain other vendors for chicken totaling approximately $12.0 million.~~

~~EPL~~As ~~has~~of ~~a fixed~~March ~~price~~2011, ~~steak~~we ~~supply~~have ~~contract~~three ~~with~~supplier acontracts ~~vendor~~for ~~that~~our ~~was~~chicken ~~entered~~which ~~into~~all terminate in ~~January 2010~~February 2012. ~~The~~ ~~contract~~Two ~~requires~~of ~~that~~ the ~~Company~~contracts ~~purchase~~have afixed ~~quantity totaling~~prices ~~approximately~~and ~~$3.7~~the ~~million~~remaining contract has a floor and ~~expires~~ceiling onprice ~~December~~which ~~31, 2010~~adjusts quarterly. AtTwo ~~September~~of ~~29,~~these ~~2010,~~contracts ~~our~~were ~~remaining~~negotiated ~~obligation~~in ~~under~~2011 ~~the contract~~at ~~was~~prices ~~approximately~~basically ~~$0.9~~consistent ~~million~~with the expiring contracts.

Contingent Lease Obligations

As a result of assigning our interest in obligations under real estate leases in connection with the sale of Company-~~owned~~operated restaurants to some of our franchisees, we are contingently liable on six lease agreements. These leases have various terms, the latest of which expires in 2015. As of ~~September~~March 2930, ~~2010~~2011, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $1.10 million. The present value of these potential payments discounted at our estimated pre-tax cost of debt at ~~September~~March 2930, ~~2010~~2011 was approximately $0.87 million. Our franchisees are primarily liable on the leases. We have cross-default provisions with these franchisees that would put them in default of their franchise agreement in the event of non-payment under the leases. We believe these cross-default provisions reduce the risk that we will be required to make payments under these leases. Accordingly, no liability has been recorded on the Company’s books related to this guarantee.

9. Senior Secured Notes (2012 Notes)

On May 22, 2009, EPL issued $132.5 million aggregate principal amount of 11¾% senior secured notes due December 1, 2012 (the “2012 Notes”) in a private placement. EPL sold the 2012 Notes at an issue price equal to 98.0% of the principal amount, resulting in gross proceeds to EPL of $129.9 million before expenses and fees. At ~~September~~March 2930, ~~2010~~2011, the Company had $~~130~~131.92 million outstanding in aggregate principal amount of the 2012 Notes. The principal value of the 2012 Notes will increase (representing accretion of original issue discount) from the date of original issuance so that the accreted value of the 2012 Notes will be equal to the full principal amount of $132.5 million at maturity. Interest is payable each year in June and December beginning December 1, 2009. The 2012 Notes are guaranteed by Intermediate and are secured by a second priority lien on substantially all of the Company’s assets, which includes all of the outstanding common stock of EPL. The 2012 Notes may be redeemed at a premium, at the discretion of EPL, after March 1, 2011, or sooner in connection with certain equity offerings. If EPL undergoes certain changes of control, each holder of the notes may require EPL to repurchase all or a part of its notes at a price of 101% of the principal amount. The Indenture governing the 2012 Notes contains a number of covenants that, among other things, restrict, subject to certain exceptions, EPL’s ability to incur additional indebtedness, pay dividends or certain restricted payments, make certain investments, sell assets, create liens, merge and enter into certain transactions with its affiliates. As of ~~September~~ 29March 30, ~~2010~~2011, EPL’s fixed charge coverage ratio was 1:1903 to 1:00 which does not meet the coverage ratio of 2:00 to 1:00 which EPL must meet in order to incur additional indebtedness (other than indebtedness under our revolving credit facility) and make dividend and other restricted payments (including distributions to Intermediate) in an aggregate amount in excess of $20.98 million. A failure to comply with this ratio affects only EPL's ability to incur additional indebtedness and make certain dividend and other restricted payments, but does not constitute a default under the 2012 notes.

EPL incurred direct finance costs of approximately $9.2 million in connection with this offering and registration of these notes. These costs have been capitalized and are included in other assets in the accompanying condensed consolidated balance sheets, and the related amortization is reflected as a component of interest expense in the accompanying condensed consolidated statement of operations. The Company used the net proceeds from the 2012 Notes to repay certain indebtedness and for general corporate purposes. In December 2009, the Company completed the exchange of these notes for registered, publicly tradable notes that have substantially identical terms of these notes.

EPL incurred direct finance costs of approximately $9.2 million in connection with this offering and registration of these notes. These costs have been capitalized and are included in other assets in the accompanying condensed consolidated balance sheets, and the related amortization is reflected as a component of interest expense in the accompanying condensed consolidated statement of operations. The Company used the net proceeds from the 2012 Notes to repay certain indebtedness and for general corporate purposes. In December 2009, we completed the exchange of these notes for registered, publicly tradable notes that have substantially identical terms of these notes.

10. Senior Unsecured Notes Payable (2013 Notes)

EPL has outstanding $106.56 million aggregate principal amount of 11¾% senior notes due November 15, 2013 (the “2013 Notes”). Interest is payable in May and November beginning May 15, 2006. The 2013 Notes are unsecured, are guaranteed by Intermediate, and may be redeemed at a premium, at the discretion of the issuer. The indenture contains certain provisions which may prohibit EPL’s ability to incur additional indebtedness, sell assets, engage in transactions with affiliates, and issue or sell preferred stock and make certain dividends and other restricted payments, among other items. As of ~~September~~March 2930, ~~2010~~ 2011, EPL’s fixed charge coverage ratio ~~was~~and 1consolidated leverage ratio were 0:1193 to 1:00 and 8:07 to1:00, respectively which ~~does~~do not meet the minimum coverage ratio of 2:00 to 1:00, or the maximum leverage ratio of 7:50 to 1:00, which EPL must meet in order to incur additional indebtedness (other than indebtedness under our revolving credit facility) and make dividend and other restricted payments (including distributions to Intermediate) in an aggregate amount in excess of $20.98 million. A failure to comply with ~~this~~these ~~ratio~~ratios affects only EPL’s ability to incur additional indebtedness and make certain dividend and other restricted payments, but does not constitute a default under the 2013 notes.

In October 2006, EPL completed the exchange of the 2013 Notes for registered, publicly tradable notes that have substantially identical terms as the 2013 Notes. The costs incurred in connection with the offering of the 2013 Notes have been capitalized and are included in other assets in the accompanying condensed consolidated balance sheets, and the related amortization is reflected as a component of interest expense in the accompanying condensed consolidated financial statements. The Company used the proceeds from the 2013 Notes to refinance certain indebtedness of the Company.

The Company purchased $2.0 million in principal amount of the 2013 Notes at a price of $1.5 million in March 2009. The net purchase price was 74% of the principal amount of such notes and resulted in a net gain of $0.5 million which is included in other income in the condensed consolidated statement of operations. The gain of $0.5 million is net of the write-off of prorated deferred finance costs of $0.1 million.

11. Revolving Credit Facility

On May 22, 2009, EPL entered into a credit agreement (the “"Credit Facility”") with Intermediate as guarantor, Jefferies Finance LLC, as administrative and syndication agent and the various lenders. ~~(see~~In ~~subsequent~~October, ~~event~~2010, ~~Note~~the ~~17)~~Credit Facility was assigned from Jefferies Finance LLC to GE Capital Financial, Inc. The terms and conditions of the credit facility remain essentially the same. The Credit Facility provides for a $12.5 million revolving line of credit with borrowings (including obligations in respect of revolving loans and letters of credit) limited at any time to the lesser of (i) $12.5 million ~~and~~or (ii) the Company’s consolidated cash ~~flow~~flows for the most recently completed trailing twelve consecutive months and, in no event, shall obligations in respect to letters of credit exceed an amount equal to $10 million. Utilizing the Credit Facility, $6.4 million of letters of credit were issued and outstanding as of ~~September 29~~March 30, ~~2010~~2011.

The Credit Facility bears interest, payable ~~quarterly~~monthly, at an Alternate Base Rate (as defined in the Credit Facility) or LIBOR, at EPL's option, plus an applicable margin. The applicable margin rate is 5.50% with respect to LIBOR and 4.50% with respect to Alternate Base Rate advances. The Credit Facility is secured by a first priority lien on substantially all of the Company’s assets and is guaranteed by Intermediate. The Credit Facility matures on July 22, 2012.

The Credit Facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to (i) incur additional indebtedness or issue preferred stock; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) sell assets; (v) make certain restricted payments; (vi) make investments, loans or advances; (vii) make certain acquisitions; (viii) engage in certain transactions with affiliates; (ix) change the Company’s lines of business or fiscal year; and (x) engage in speculative hedging transactions. In addition, the Credit Facility requires the Company to maintain, on a consolidated basis, a minimum level of consolidated cash ~~flow~~flows at all times. As of ~~September~~March 2930, ~~2010~~2011, the Company was in compliance with all of the financial covenants contained in the Credit Facility and had $6.1 million available for borrowings under the revolving line of credit.

12. PIK Notes (2014 Notes)

At ~~September~~ 29March 30, ~~2010~~2011, Intermediate had $29.3 million outstanding in aggregate principal amount, along with $0.35 million of ~~the~~an accrued premium discussed below, of the 14½% PIK notes due 2014 (the “2014 Notes”). No cash interest accrued on these notes prior to November 15, 2009. Instead, the principal value of these notes increased (representing accretion of original issue discount) from the date of original issuance until but not including November 15, 2009 at a rate of 14½% per annum compounded annually, so that the accreted value of these notes on November 15, 2009 was equal to the full principal amount of $29.3 million due at maturity.

Beginning November 15, 2009, cash interest accrued on these notes at an annual rate of 14½% per annum payable semi-annually in arrears on May 15 and November 15 of each year, beginning May 15, 2010. Principal is due on November 15, 2014. The indenture governing these notes restricts Intermediate’s and EPL’s ability to, among other items, incur additional indebtedness, sell assets, engage in transactions with affiliates and issue or sell preferred stock. The indenture governing these notes also limits the ability of Intermediate or EPL to make payments to El Pollo Loco Holdings, Inc., the immediate parent corporation of Intermediate. As of ~~September~~March 2930, ~~2010~~2011, the Company’s fixed charge coverage ratio ~~was~~and consolidated leverage ratio were 0:93 to 1:1100 and 8:07 to 1:00, respectively which ~~does~~do not meet the minimum coverage ratio of 2:00 to 1:00 or the maximum leverage ratio of 7:50 to 1:00, which the Company must meet in order to incur additional indebtedness (other than indebtedness under our revolving credit facility) and make dividend and other restricted to payments in an aggregate amount in excess of $20.9 8 million. A failure to comply with ~~this~~these ~~ratio~~ratios affects only the Company’s ability to incur additional indebtedness and make certain dividend and other restricted payments and does not constitute a default under the 2014 notes.

These notes are effectively subordinated to all existing and future indebtedness and other liabilities of EPL. These notes are unsecured and are not guaranteed. In ~~If any of these notes are outstanding at~~ May ~~15,~~ 2011, Intermediate is required to mandatorily redeem ~~for~~$10,144,000 ~~cash~~principal ~~a portion~~amount of ~~each~~its ~~note~~2014 ~~then~~Notes ~~outstanding~~ at a redemption price of 104.5% of the accreted value of(as ~~such portion~~defined ofin ~~such~~the ~~note,~~indenture ~~plus~~for ~~accrued~~the ~~and~~2014 ~~unpaid~~Notes), along with the interest, ifpayment ~~any~~that will then be due. This ~~payment~~redemption is currently estimated to be approximately $10.6 million, plus the interest. Additionally, Intermediate may, at its discretion, redeem for a premium any or all of these notes, subject to certain provisions contained in the indenture governing these notes. As a holding company, the stock of EPL constitutes Intermediate’s only material asset. Consequently, EPL conducts all of the Company’s consolidated operations and owns substantially all of the consolidated operating assets. Intermediate has no material assets or operations; the Company’s principal source of the cash required to pay its obligations is the cash that EPL generates from its operations. EPL is a separate and distinct legal entity, has no obligation to make funds available to Intermediate, and the 2013 notes (see Note 10) and the 2012 Notes (see Note 9), have restrictions that limit distributions or dividends that may be paid by EPL to Intermediate. CAC and EPL intend to provide the funds required to enable Intermediate to make the $10.6 million redemption payment and interest that is due on May 15, 2011. See Note 14 for condensed consolidating financial statements of Intermediate and EPL.

In October 2006, Intermediate completed the exchange of these notes for registered, publicly tradable notes that have substantially identical terms as these notes. The costs incurred in connection with the registration of these notes were capitalized and included in other assets in the condensed consolidated balance sheets and the related amortization was reflected as a component of interest expense in the condensed consolidated statements of operations.

13. Income Taxes

The Company’s taxable income or loss is included in the consolidated federal and state income tax returns of CAC. The Company records its provision for income taxes based on its separate stand-alone operating results using the asset and liability method.

As of December 3029, ~~2009~~2010 and ~~September~~March 2930, ~~2010~~2011, the Company has no material unrecognized tax benefits.

The Company will continue to classify income tax penalties and interest as part of the provision for income taxes in its Condensed Consolidated Statements of Operations. The Company has not recorded accrued interest and penalties on uncertain tax positions as of ~~September~~March 2930, ~~2010~~2011. The Company’s liability for uncertain tax positions is reviewed periodically and is adjusted as events occur that affect the estimated liability for additional taxes, such as the lapsing of applicable statutes of limitations, the conclusion of tax audits, the measurement of additional estimated liabilities based on current calculations, the identification of new uncertain tax positions, the release of administrative tax guidance affecting the Company’s estimates of tax liabilities, or the rendering of court decisions affecting its estimates of tax liabilities.

The Company recorded a full valuation allowance on its deferred tax assets in 2009 due to uncertainties surrounding the Company’s ability to generate future taxable income to realize such deferred income tax assets. In evaluating the need for a valuation allowance, the Company made judgments and estimates related to future taxable income, the timing of the reversal of temporary differences and facts and circumstances. The Company continues to maintain a full valuation allowance against its deferred tax assets as of ~~September~~March 2930, ~~2010~~ 2011. However, subsequent changes in facts and circumstances that affect the Company’s judgments or estimates in determining the proper deferred tax assets or liabilities could materially affect the valuation allowance.

14. Financial Information for Parent Guarantor and Subsidiary

The following presents condensed consolidating financial information for the Company, segregating: (1) Intermediate, the parent which has unconditionally guaranteed, jointly and severally the 2012 Notes and 2013 Notes and has pledged its investment in the common stock of EPL as collateral for the 2012 Notes; and (2) EPL, the issuer of the 2012 Notes that also unconditionally guaranteed, jointly and severally the 2012 Notes. EPL is a wholly owned subsidiary of Intermediate.

For the Thirteen Weeks Ended ~~September~~March 2930, ~~2010~~2011

(in thousands)

													Consolidated
	EPL			Intermediate			Subtotal			Eliminations			Total
Revenues	$	6866,~~213~~862		$	-		$	6866,~~213~~862		$	-		$	6866,~~213~~862
Operating expenses		6361,~~311~~122			710			6361,~~318~~132			-			6361,~~318~~132
Operating income (loss)		45,~~902~~740			(710	)		45,~~895~~730			-			45,~~895~~730
Investment in subsidiary		-			34,~~454~~656			34,~~454~~656			(34,~~454~~656	)		-
Interest expense and other		8,~~193~~277			1,~~313~~078			9,~~506~~355			-			9,~~506~~355
Provision for income taxes		~~163~~2,119			58(1,025	)		~~221~~1,094			-			~~221~~1,094
Net loss		(34,~~454~~656	)		(4,~~832~~719	)		(89,~~286~~375	)		34,~~454~~656			(4,~~832~~719	)
Cash flow provided by operations		5,571			-			5,571			-			5,571
Cash flow used in investing activities		(672	)		-			(672	)		-			(672	)
Cash flow used in financing activities		(69	)		-			(69	)		-			(69	)
Net increase in cash		4,830			-			4,830			-			4,830
Cash and equivalents at beginning of period		5,337			150			5,487			-			5,487
Cash and equivalents at end of period		10,167			150			10,317			-			10,317

For the Thirteen Weeks Ended ~~September~~March 3031, ~~2009~~2010

(in thousands)

	EPL			Intermediate			Subtotal			Eliminations			Consolidated Total
													Consolidated
Revenues	$	68,504		$	-		$	68,504		$	-		$	68,504
	EPL			Intermediate			Subtotal			Eliminations			Total
Operating expenses		63,745			22			63,767			-			63,767
Revenues	$	67,992		$	-		$	67,992		$	-		$	67,992
Operating income (loss)		4,759			(22	)		4,737			-			4,737
Operating expenses		63,574			65			63,639			-			63,639
Investment in subsidiary		-			3,711			3,711			(3,711	)		-
Operating income (loss)		4,418			(65	)		4,353			-			4,353
Interest expense and other		8,068			1,007			9,075			-			9,075
Investment in subsidiary		-			4,574			4,574			(4,574	)		-
Provision (benefit) for income taxes		402			(96	)		306			-			306
Interest expense and other		8,155			1,077			9,232			-			9,232
Net loss		(3,711	)		(4,644	)		(8,355	)		3,711			(4,644	)
Provision (benefit) for income taxes		837			(92	)		745			-			745
Net loss		(4,574	)		(5,624	)		(10,198	)		4,574			(5,624	)
Cash flow provided by operations		1,398			(1	)		1,397			-			1,397
Cash flow used in investing activities		(1,679	)		-			(1,679	)		-			(1,679	)
Cash flow used in financing activities		(120	)		-			(120	)		-			(120	)
Net decrease in cash		(401	)		(1	)		(402	)		-			(402	)
Cash and equivalents at beginning of period		11,126			151			11,277			-			11,277
Cash and equivalents at end of period		10,725			150			10,875			-			10,875

~~For~~As ~~the Thirty-nine~~of ~~Weeks~~March ~~Ended September 29~~30, ~~2010~~2011

(in thousands)

													Consolidated
	EPL			Intermediate			Subtotal			Eliminations			Total
Revenues	$	207,440		$	-		$	207,440		$	-		$	207,440
ASSETS
Operating expenses		190,863			88			190,951			-			190,951
Current Assets	$	19,462		$	154		$	19,616		$	(78	)	$	19,538
Operating income (loss)		16,577			(88	)		16,489			-			16,489
Investment in subsidiary		-			86,600			86,600			(86,600	)		-
Investment in subsidiary		-			8,892			8,892			(8,892	)		-
Property and equipment-net		66,101			-			66,101			-			66,101
Interest expense and other		24,513			3,468			27,981			-			27,981
Other assets		321,555			3,149			324,704			(2,947	)		321,757
Provision for income taxes		956			38			994			-			994
Total assets		407,118			89,903			497,021			(89,625	)		407,396
Net loss		(8,892	)		(12,486	)		(21,378	)		8,892			(12,486	)
LIABILITIES & STOCKHOLDER’S EQUITY
Cash flow provided by (used in) operations		8,591			(2,128	)		6,463			-			6,463
Current liabilities		38,559			12,185			50,744			(2,789	)		47,955
Cash flow used in investing activities		(5,270	)		-			(5,270	)		-			(5,270	)
Non-current liabilities		281,959			18,174			300,133			(236	)		299,897
Cash flow (used in) provided by financing activities		(2,538	)		2,127			(411	)		-			(411	)
Stockholder’s equity		86,600			59,544			146,144			(86,600	)		59,544
Net increase (decrease) in cash		783			(1	)		782			-			782
Total liabilities & stockholder’s equity		407,118			89,903			497,021			(89,625	)		407,396
Cash and equivalents at beginning of period		11,126			151			11,277			-			11,277
Cash and equivalents at end of period		11,909			150			12,059			-			12,059

~~For~~As ~~the Thirty-nine~~of ~~Weeks~~December ~~Ended September 30~~29, ~~2009~~2010

(in thousands)

													Consolidated
	EPL			Intermediate			Subtotal			Eliminations			Total
Revenues	$	211,801		$	-		$	211,801		$	-		$	211,801
ASSETS
Operating expenses		198,780			99			198,879			-			198,879
Current assets	$	13,001		$	156		$	13,157		$	(78	)	$	13,079
Operating income (loss)		13,021			(99	)		12,922			-			12,922
Investment in subsidiary		-			91,318			91,318			(91,318	)		-
Investment in subsidiary		-			19,518			19,518			(19,518	)		-
Property and equipment-net		67,843			-			67,843			-			67,843
Interest expense and other		20,566			2,926			23,492			-			23,492
Other assets		322,434			3,170			325,604			(2,956	)		322,648
Provision for income taxes		11,973			7,875			19,848			-			19,848
Total assets		403,278			94,644			497,922			(94,352	)		403,570
Net loss		(19,518	)		(30,418	)		(49,936	)		19,518			(30,418	)
LIABILITIES & STOCKHOLDR’S EQUITY
Cash flow provided by operations		13,372			-			13,372			-			13,372
Current liabilities		31,855			11,120			42,975			(2,796	)		40,179
Cash flow used in investing activities		(7,580	)		-			(7,580	)		-			(7,580	)
Non-current liabilities		280,105			19,199			299,304			(238	)		299,066
Cash flow provided by financing activities		13,183			-			13,183			-			13,183
Stockholder’s equity		91,318			64,325			155,643			(91,318	)		64,325
Net increase in cash		18,975			-			18,975			-			18,975
Total liabilities & stockholder’s equity		403,278			94,644			497,922			(94,352	)		403,570
Cash and equivalents at beginning of period		926			150			1,076			-			1,076
Cash and equivalents at end of period		19,901			150			20,051			-			20,051

As of September 29, 2010

(in thousands)

										Consolidated
	EPL		Intermediate		Subtotal		Eliminations			Total
ASSETS
Current Assets	$	22,698	$	151	$	22,849	$	(461	)	$	22,388
Investment in subsidiary		-		119,788		119,788		(119,788	)		-
Property and equipment		73,491		-		73,491		-			73,491
Other assets		353,392		3,218		356,610		(2,989	)		353,621
Total assets		449,581		123,157		572,738		(123,238	)		449,500
LIABILITIES & EQUITY
Current liabilities		37,513		12,185		49,698		(2,989	)		46,709
Non-current liabilities		292,280		19,008		311,288		(461	)		310,827
Equity		119,788		91,964		211,752		(119,788	)		91,964
Total liabilities & equity		449,581		123,157		572,738		(123,238	)		449,500

As of December 30, 2009

(in thousands)

										Consolidated
	EPL		Intermediate		Subtotal		Eliminations			Total
ASSETS
Current assets	$	28,516	$	156	$	28,672	$	(462	)	$	28,210
Investment in subsidiary		-		130,368		130,368		(130,368	)		-
Property and equipment		77,868		-		77,868		-			77,868
Other assets		355,541		3,342		358,883		(3,071	)		355,812
Total assets		461,925		133,866		595,791		(133,901	)		461,890
LIABILITIES & EQUITY
Current liabilities		40,132		514		40,646		(3,072	)		37,574
Non-current liabilities		291,425		29,342		320,767		(461	)		320,306
Equity		130,368		104,010		234,378		(130,368	)		104,010
Total liabilities & equity		461,925		133,866		595,791		(133,901	)		461,890

15. New Accounting Pronouncements

~~In October~~The ~~2009,~~following is ~~the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2009-13, Multiple-Deliverable Revenue Arrangements—~~a ~~consensus of the FASB Emerging Issues Task Force, which amends the guidance in ASC 605, Revenue Recognition.~~ ~~ASU~~recent ~~No. 2009-13 eliminates the residual method of~~ accounting ~~for~~standard ~~revenue~~adopted on undelivered products and instead, requires companies to allocate revenue to each of the deliverable products based on their relative selling price. In addition, this ASU expands the disclosure requirements regarding multiple-deliverable arrangements. ASU No. 2009-13 will be effective for revenue arrangements entered into during fiscal years beginning on or ~~after~~issued ~~June 15,~~that ~~2010. The~~could ~~Company’s adoption of ASU No. 2009-13 is not expected to~~ have aan ~~material~~ impact on the Company~~’s financial position or results of operations.~~:

16In December 2010, the FASB issued ASU 2010-28, "Intangibles - Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. ~~Restatement~~" ASU 2010-28 provides amendments to Topic 350 to modify Step 1 of ~~Condensed~~the ~~Consolidated~~goodwill ~~Financial~~impairment ~~Statements~~test for reporting units with zero or negative carrying amounts to clarify that, for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The application of the requirement of this guidance did not have a material effect on the accompanying condensed consolidated financial statements.

We have restated our accompanying 13 weeks ended and 39 weeks ended September 30, 2009 Condensed Consolidated Statements of Operations and 39 weeks ended September 29, 2009 Condensed Consolidated Statements of Cash Flows from amounts previously reported to correct an income tax error associated with the accounting for a full valuation allowance recorded during the second and third quarters of 2009. The error was due to incorrectly classifying certain intangible assets as indefinite-lived assets when the full valuation allowance was recorded.16

The correction of the error, as reflected in our 13 weeks ended and 39 weeks ended September 30, 2009 Condensed Consolidated Statements of Operations, decreased our provision for income taxes and net loss for the period by $3,116,000. This correction also decreased our net loss and deferred income taxes on the Condensed Consolidated Statements of Cash Flows for the 39 weeks ended September 30, 2009 by $3,116,000 as well.

The following is a summary of effects of these changes on the 2009 Condensed Consolidated Financial Statements:

	As
Condensed Consolidated Statements of Operations	Previously
(In thousands)	Reported			Adjustments			As Restated
13 Weeks Ended September 30, 2009:
Provision for income taxes	$	675		$	(369	)	$	306
Net loss		(5,013	)		369			(4,644	)
39 Weeks Ended September 30, 2009:
Provision for income taxes		22,964			(3,116	)		19,848
Net loss		(33,534	)		3,116			(30,418	)

	As
Condensed Consolidated Statements of Cash Flows	Previously
(In thousands)	Reported			Adjustments			As Restated
39 Weeks Ended September 30, 2009:
Net loss	$	(33,534	)	$	3,116		$	(30,418	)
Deferred income taxes		22,289			(3,116	)		19,173

17. Subsequent Event

On October 21, 2010, the Company’s Credit Facility was assigned from Jefferies Finance LLC to GE Capital Financial, Inc. In connection with this assignment the parties entered into an Agency and Assignment Agreement and Amendment No. 1 to the Credit Agreement and the Other Loan Documents. The terms and conditions of the Credit Facility remain essentially the same as described in Note 11.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion together with our condensed consolidated financial statements and related notes thereto included elsewhere in this filing. ~~The following management’s discussion and analysis gives effect to the restatement discussed in Note 16 to the Condensed Consolidated Financial Statements.~~

Certain statements contained within this report may be deemed to constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company intends that all such statements be subject to the safe harbor provisions contained in those sections. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. ~~Forward-looking statements~~They ~~generally~~may contain words such as “believe,” “belief,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will,” “should,” “may,” “could,” ~~or words~~“continue,” or“predict,” ~~phrases~~“strategy,” of“will likely result,” “will likely continue” and similar ~~meaning~~expressions that are generally intended to identify forward-looking statements.

These forward-looking statements reflect our current views with respect to future results, performance, achievements or events. Readers are cautioned that such forward-looking statements are subject to risks and uncertainties and many important factors, including factors outside of the control of the Company, which could cause actual results, performance, achievements or events to differ materially from those discussed in the forward-looking statements. Also, these forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do not intend to ~~update~~provide ~~you~~any updates concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this report.

Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include but are not limited to the Company’s history of net losses, including if the Company continues to incur net losses in the future; the fact that any possible refinancing alternatives may be costly, difficult to obtain or otherwise be unavailable on terms the Company deems commercially reasonable or otherwise and such refinancing may not be completed for a number of factors, including factors outside of the Company’s control; the adverse impact of economic conditions on our operating results and financial condition, on our ability to comply with the terms and covenants of our debt agreements and on our ability to pay or to refinance our existing debt or to obtain additional financing; our substantial level of indebtedness; the fact that new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits; anticipated future restaurant openings may be delayed or cancelled; food-borne-illness incidents; negative publicity, whether or not valid; increases in the cost of chicken orand other product costs; our dependence upon frequent deliveries of food and other supplies; our vulnerability to changes in consumer preferences and economic conditions; our sensitivity to events and conditions in the greater Los Angeles area, our largest market; our ability to compete successfully with other quick service and fast casual restaurants; our ability to expand into new markets; our reliance on our franchisees, who have also been adversely impacted by the recession and which may incur financial hardships, be unable to obtain credit or declare bankruptcy; matters relating to labor laws and the adverse impact of related litigation, including wage and hour class actions; our ability to support our franchise system; our ability to renew leases at the end of their ~~term~~terms; the impact of applicable federal, state or local government regulations; our ability to protect our name and logo and other proprietary information; risks arising from ~~the~~recent ~~delay~~executive ~~or inability to hire new executives for our currently vacant President/Chief Executive Officer~~ and ~~Chief~~board ~~Marketing~~turnover, ~~Officer positions~~ since the Company ~~depends~~relies on the unique abilities, experience and knowledge of its directors and officers; litigation we face in connection with our operations; and other factors, uncertainties and risks, including those set forth elsewhere herein or outside of our control. Actual results may differ materially due to various factors, uncertainties and risks, including those described in our Annual Report on Form 10-K (File No. 333-115644) as filed with the Securities and Exchange Commission on March 3025, ~~2010~~2011, as updated from time to time in our quarterly reports, ~~and~~ current reports ~~filed with the Commission~~ and asother ~~updated~~filings infiled ~~this~~with ~~Form 10-Q. Although~~ the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, the Company cannot assure the reader that the results, performance, achievements or events contemplated by the forward-looking statements will be realized in the timeframe anticipated or at allCommission. In light of the significant uncertainties inherent in forward-looking statement included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s objectives or plans will be achieved. Accordingly, readers are cautioned not to place undue reliance on such forward-looking statements.

19Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, the Company cannot assure the reader that the results, performance, achievements or events contemplated by the forward-looking statements will be realized in the time frame anticipated or at all. In light of the significant uncertainties inherent in forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s objectives or plans will be achieved. Accordingly, readers are cautioned not to place undue reliance on such forward-looking statements.

We use a 52-53 week fiscal year ending on the last Wednesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. Fiscal year 2009, which ended December 30, 2009, was a 52-week fiscal year. Fiscal year 2010 which will end December 29, 2010, is also a 52-week fiscal year.17

We use a 52-53 week fiscal year ending on the last Wednesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. Fiscal year 2010, which ended December 29, 2010, was a 52-week fiscal year. Fiscal year 2011 which will end December 28, 2011, is also a 52-week fiscal year.

References to “our restaurant system” or “system-wide” mean both company-operated and franchised restaurants. Unless otherwise indicated, references to “our restaurants” or results or statistics attributable to one or more restaurants without expressly identifying them as company-operated, franchise or the entire restaurant system mean our company-operated restaurants only.

Overview

EPL Intermediate, Inc. (“Intermediate”) through its wholly-owned subsidiary El Pollo Loco, Inc. (“EPL” and together with Intermediate, the “Company,” “we,” “us” and “our”) owns, operates and franchises restaurants specializing in marinated flame-grilled chicken. Our distinct menu, inspired by the kitchens of Mexico, features our authentic recipe flame-grilled chicken, which along with our service format and value price points, serves to differentiate our unique brand. ~~In the first half of 2010, we introduced steak products as an additional choice for our customers.~~ We offer high-quality, freshly-prepared food commonly found in fast casual restaurants, while at the same time providing the value and convenience typically available at traditional quick serve restaurant or QSR chains. ~~Our~~As of March 30, 2011, our restaurants are located principally in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, ~~Missouri,~~ Nevada, ~~New Jersey,~~ Oregon, Texas~~, Utah,~~ and ~~Virginia~~Utah. Our typical restaurant is a freestanding building ranging from approximately 2,200 to 2,600 square feet with seating for approximately 60 customers and offering drive-thru convenience.

Our store counts at ~~September~~March 3031, ~~2009~~2010, ~~September~~March 2930, ~~2010~~2011 and December 3029, ~~2009~~2010 are set forth below:

El Pollo Loco Restaurants

September 30, 2009

September 29, 2010

December 30, 2009

March 31, 2010

March 30, 2011

December 29, 2010

Company-owned

171

~~170~~171

~~172~~171

Franchised

~~244~~241

~~242~~236

~~243~~241

System-wide

~~415~~412

~~412~~407

~~415~~412

During the 39thirteen weeks ended ~~September~~March 2930, ~~2010~~2011, the Company did not open ~~any~~or ~~new restaurants~~close ~~and~~any ~~closed~~company-operated ~~two~~ restaurants. During this same 39thirteen week period, our franchisees ~~opened~~closed ~~two~~five ~~new~~ restaurants and ~~closed~~did ~~three~~ not open any new restaurants.

We plan to open one to two company-operated ~~restaurant~~restaurants in ~~the~~fiscal ~~fourth~~2011. ~~quarter~~We ofestimate ~~fiscal~~that ~~2010. Our~~our franchisees ~~opened~~will aopen ~~total~~one ofto three new restaurants in fiscal ~~2010 (the third restaurant opened on October 19, 2010)~~2011. The growth in new restaurant openings and the rate of restaurant closings have been, and are expected to continue to be, negatively impacted by ~~the~~a challenging economic climate, as discussed below. In response to this challenging economic environment, we are adjusting our growth strategy for the future to focus on new proto-type designs which are expected to have lower construction costs than our past restaurant designs.

AtAs ~~the end~~ of ~~the~~March ~~third~~30, ~~quarter of 2010~~2011, we had 1914 system-wide restaurants open in markets east of the Rockies. ~~The~~Additionally, 19three ~~open~~stores (two franchise locations and one company location) were closed in 2010 and four stores ~~are~~located ~~currently~~east of the Rockies (all franchise locations) were closed in 2011 in these areas due to low sales. Our restaurants open east of the Rockies are experiencing a wide range of sales volumes, and a majority of them have sales volumes that are significantly less than the chain average due to the lack of brand awareness in the new markets.

2018

Our revenue is derived from two primary sources, company-operated restaurant revenue and franchise revenue, the latter of which is comprised principally of franchise royalties and to a lesser extent franchise fees and sublease rental income. A common measure of financial performance in the restaurant industry is “same-store sales.” A restaurant enters our comparable restaurant base for the calculation of same-store sales the first full week after the 15-month anniversary of its opening. For the 13 weeks ended ~~September~~March 2930, ~~2010~~2011, same-store sales for system-wide restaurants decreased 2.24% compared to the corresponding period in ~~2009. For the 39 weeks ended September 29,~~ 2010~~, same-store sales for system-wide restaurants decreased 4~~.7% ~~compared to the corresponding period in 2009.~~ System-wide same-store sales include same-store sales at all company-owned stores and franchise-owned stores, as reported by franchisees. We use system-wide sales information in connection with store development decisions, planning and budgeting analyses. This information is useful in assessing consumer acceptance of our brand and facilitates an understanding of financial performance as our franchisees pay royalties (included in franchise revenue) and contribute to advertising pools based on a percentage of their sales. Same-store sales at company-operated restaurants decreased 1.17% for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 compared to the 13 weeks ended ~~September~~March 3031, ~~2009~~2010. Same-store sales at ~~company~~franchise-operated restaurants decreased 3.30% for the 3913 weeks ended ~~September~~March 2930, ~~2010~~2011 compared to the 39 13 weeks ended ~~September~~March 3031, ~~2009~~2010.

Changes in company-operated restaurant revenue reflect changes in the number of company-operated restaurants and changes in same-store sales, which are impacted by price and transaction volume changes. The challenging economic conditions and ~~increased~~ relatively high unemployment, especially in California where a majority of our company-operated restaurants are located, negatively impacted our transaction volume infor the first ~~three~~quarter ~~quarters~~2011 ofand year 2010 and our average check for the first quarter 2011. ~~Consumers~~Based ~~are~~on ~~eating~~our experience, we believe consumers continue to eat out less than before the recent economic challenges began, and when they do eat out, are more sensitive to price increases and are looking for specials and promotions. This has an impact on both same-store sales and on restaurant margins. We believe ~~2010~~2011 ~~has~~may ~~been~~be as challenging as ~~2009~~2010 from an economic standpoint for ~~QSR’s~~QSRs which may ~~making it difficult to achieve~~ impact same-store sales ~~growth~~. Many factors can influence sales at all or specific restaurants, including increased competition, strength of marketing promotions, the restaurant manager’s operational execution and changes in local market conditions and demographics. The February 2011 unemployment rate in California, our largest market, was 12.2% compared to 8.9% nationally.

Franchise revenue consists of royalties, initial franchise fees revenue, IT support services fees and franchise rental income. Royalties average 4% of the franchisees’ net sales. In ~~During~~February ~~2009~~2011 ~~and~~a ~~the~~franchisee ~~first~~operating ~~three~~thirteen ~~quarters~~restaurants ofmainly ~~2010, due to adverse economic conditions, some of our franchises were late~~ in the ~~payment~~greater ~~of franchise~~Los ~~fees~~Angeles ~~due~~area ~~us and one franchisee~~ filed for ~~bankruptcy~~Chapter in11 ~~2009 (we purchased four of its stores and five other stores were closed)~~reorganization. As of ~~September~~March 2930, ~~2010~~2011, we had commitments ~~from franchisees~~ to open 7047 ~~new~~ restaurants at various dates through 2024. However, the ~~current~~ adverse economic and liquidity conditions have caused some franchisees to delay the opening of new restaurants under existing development agreements or to terminate such agreements. As a result of these conditions, we ~~currently~~ estimate that 8as few as four of those potential new restaurants could open. As of ~~September~~March 2930, ~~2010~~2011 we ~~were~~ are legally authorized to market franchises in 3638 states. We have entered into development agreements that historically ~~usually~~resulted ~~result~~ in area development fees being recognized as the related restaurants open. Due to the recent recession and associated liquidity crisis, most of our developing franchisees are having a difficult time obtaining financing for new restaurants. Additionally, some of our franchisees ~~that~~ who also operate other restaurant concepts have incurred significant loss of cash flow due to declining sales in these other concepts, as well as their El Pollo Loco restaurants. This has had the effect of slowing development of new El Pollo Loco restaurants, especially in new markets. In addition, the challenging economic conditions have had a negative effect on our ability to recruit and financially qualify new single-unit and developing franchisees. We expect these trends to continue ~~through~~at ~~2010~~least ~~and~~through ~~even into~~ 2011. We expect that many of the franchisees who have development agreements will not be able to meet the new unit opening dates required under their agreements. During ~~There~~2010, ~~were~~eight ~~two~~ franchise development agreements ~~that~~ were terminated ~~in the first quarter of 2010~~ and as a result, the Company recognized ~~approximately~~ $~~240~~430,000 of income related to ~~those terminations~~these indevelopment ~~the~~agreements ~~first~~(two ~~quarter~~development ofagreements ~~2010.~~totaling No$240,000 ~~franchise development agreements~~ were terminated in the ~~second~~first quarter of 2010). During In the ~~third~~13-week ~~quarter~~period ofending ~~2010~~March 30, ~~the~~ 2011, one franchise development agreement was terminated. The Company recognized ~~approximately~~ $~~50,000~~0.1 million of income related to the termination of ~~one~~ ~~franchise~~this ~~development~~ agreement.

We sublease facilities to certain franchisees and the sublease rent is included in our franchise revenue. This revenue may exceed, equal or be less than rent payments made under the leases that are included in franchise expense depending on the specific location. Since we do not expect to lease or sublease new properties to our franchisees as we expand our franchise restaurants, we expect the portion of franchise revenue attributable to franchise rental income to decrease over time.

Product cost, which includes food and paper costs, is our largest single expense. Chicken accounts for the largest part of product cost, ~~which~~and was approximately 12.18% of revenue ~~for~~from company-~~owned~~operated restaurants infor the ~~first 39~~ 13-weeks ended ~~September~~ 29March 30, ~~2010~~2011. These costs are subject to increase or decrease based on commodity cost changes and depend in part on the success of controls we have in place to manage product cost in the restaurants. WeAs ~~currently~~of ~~have~~March ~~three~~30, ~~supply contracts~~2011, ~~for~~we ~~chicken.~~have ~~Two~~three ofsupplier ~~the~~ contracts ~~have~~for aour ~~floor and ceiling price for~~ chicken which ~~expire~~all terminate in February ~~2011~~2012. ~~and~~Two ~~our~~of ~~remaining~~the ~~commitments to purchase chicken under these two supply~~ contracts ~~totaled~~have ~~approximately~~fixed ~~$12.0~~prices ~~million~~and ~~at September~~the ~~29,~~remaining ~~2010. In March 2010, we entered into a new two year supply~~ contract ~~for chicken that~~ has a ~~fixed~~floor and ceiling price ~~adjusted~~which ~~annually~~adjusts quarterly. Two ~~This~~of ~~new chicken~~these ~~supply~~contracts ~~contract~~were ~~has~~negotiated ~~pricing~~in ~~that~~2011 isat ~~relatively~~prices basically consistent ~~compared~~with to the ~~prior~~expiring ~~year’s~~contracts. As ~~expired~~of ~~contract~~March ~~and~~30, ~~provides~~2011 ~~that~~the wetotal ~~will~~estimated ~~make~~remaining ~~purchases~~obligation of to purchase chicken ~~totaling~~was approximately $2026.32 million. ~~from~~We ~~the~~also ~~vendor~~have ~~over the~~ two ~~year~~ longer term ofbeverage ~~the~~supply ~~contract~~agreements. The ~~We also have long-term~~ beverage supply agreements ~~with~~ have terms extending into late 2011 and 2012 with estimated remaining obligations at ~~September~~ 29March 30, ~~2010~~2011 totaling $34.85 million ~~and a fixed price steak supply contract which expires on December 31, 2010~~. At September 29, 2010, we estimate that our remaining obligation under this steak supply contract was approximately $0.9 million. For the balance of 2010, based upon current market conditions, we currently believe that our overall product costs will in the best case remain relatively constant, although increases are possible.

2119

Payroll and benefits make up the next largest single expense. Payroll and benefits have been and remain subject to inflation and other increases, including minimum wage increases and expenses for health insurance and workers’ compensation insurance, which we self-insure. A significant number of our hourly staff ~~are~~is paid at rates consistent with the applicable federal or state minimum wage and, accordingly, increases in the minimum wage will increase our labor cost. Should there be any increases in minimum wages or other employee benefits, there is no assurance that we will be able to increase menu prices in the future to offset any of these ~~increased~~increases costs. Workers’ compensation insurance costs are subject to a number of factors, including the impact of legislation. Except for a slight increase which we experienced in this quarter, we have generally seen an overall reduction over the long term in the number of workers’ compensation claims over time due to employee safety initiatives that we implemented in 2002. We ~~cannot determine whether positive trend will continue in the future or whether future costs related to these types of claims may or may not increase. We~~ self-insure employee health benefits. We cannot estimate at this time the effect that the recently passed healthcare reform legislation will have on our self -insurance programs or on our business, financial condition, results of operations or cash ~~flow~~flows, although we expect that it will increase our future health insurance costs significantly and, accordingly, have a negative impact on us and on some of our franchisees as we currently do not believe that all such increased costs can be passed on to our customers through higher prices given current economic and competitive conditions.

Depreciation and amortization expense consists primarily of depreciation of property and equipment of our restaurants.

Other operating expenses include restaurant other operating expense, franchise expense, and general and administrative expense.

Restaurant other operating expense includes occupancy, advertising and other costs such as utilities, repair and maintenance, janitorial and cleaning and operating supplies.

Franchise expense consists primarily of rent expense that we pay to landlords associated with leases under restaurants we are subleasing to franchisees. Franchise expense usually fluctuates primarily as subleases expire and is to some degree based on rents that are tied to a percentage of sales calculation. Because we do not expect to lease or sublease new properties to our franchisees as we expand our franchise restaurants, we expect franchise expense as a percentage of franchise revenue to decrease over time. Expansion of our franchise operations does not require us to incur material additional capital expenditures.

General and administrative expense includes all corporate and administrative functions that support existing operations. Included in general and ~~provide~~administrative ~~the~~expense ~~infrastructure~~are fees paid to ~~facilitate our~~affiliates ~~growth~~of certain directors pursuant to a Monitoring and Management Services Agreement. ~~These~~Since ~~expenses~~we ~~are~~expect ~~impacted~~challenging byeconomic ~~litigation~~conditions ~~costs~~to continue throughout 2011, ~~directors~~we continue to closely watch general and ~~officers~~ ~~insurance,~~administrative ~~compliance~~expenses ~~with~~by, ~~laws~~among ~~relating~~other tothings, ~~corporate~~deferring ~~governance~~raises and ~~public~~ ~~disclosure~~promotions, and ~~audit~~minimizing travel and ~~tax~~meeting ~~fees~~costs.

~~2010~~ 2011 Initiatives

In ~~January~~ ~~2010~~2011, we ~~introduced~~intend ~~steak,~~ to ~~our~~continue ~~menu~~to infocus ~~a limited time offer promotion. The citrus-marinade and signature flame-grilling technique~~ on ~~our~~ ~~steak products provides an additional choice for our customers to enjoy, in addition to our flame-grilled chicken products. After evaluation of~~ the ~~steak products~~following ~~during~~broad the first quarter of 2010, the Company added steak as a permanent choice to our menu in the second quarter of 2010. As of the 39 weeks ended September 29, 2010, steak products were approximately 5.8% of our total sales mix as a percent of restaurant sales.initiatives:

~~We have “refreshed” the majority of our company~~-~~owned~~ ~~stores~~Grow torestaurant ~~improve~~comparable ~~the~~sales: ~~appearance of~~aligning ~~our units. The “refresh” scope of work may have included a fresh coat of paint to the interior and/or exterior~~menu, ~~wallpaper,~~marketing ~~restroom finishes, replacing lighting fixtures~~ and ~~ceilings~~media ~~and replacing tables, chairs, and artwork in the restaurants. As of September 29, 2010, the Company had “refreshed” approximately 115 restaurants. Our total cost~~ to ~~“refresh”~~drive ~~Company~~traffic stores was $3.1 million. Additionally, 150 franchisee-owned restaurants have been scoped for the “refresh” program. In order to conserve capital until our operating results improve, the Company believes this is the best alternative to a complete and ~~more~~ ~~expensive~~same ~~“re-image”~~store ~~program~~sales ~~at this time.~~growth;

22- Improve margins and return on invested capital: continued focus on labor, food cost management, other expenses and capital expenditures;

Best in Class guest experience: consistently deliver a superior guest experience through quality products in a clean, welcoming environment;

Build brand culture: align, focus and energize employees and franchisees around common goals;

New development growth: develop new restaurant prototype for rollout in core markets

We face numerous challenges in trying to achieve these initiatives for 2011, including, but not limited to, the impact that the challenging economic conditions have had on our business and financial results, the limitations we experience as a result of our substantial indebtedness, the numerous challenges inherent in the QSR industry, including controlling product costs and payroll and benefit expenses, and other factors and risks, some of which may be beyond our control. To accomplish these initiatives, we will need to successfully manage our operations and increase our sales, which we may not be able to do in light of challenging economic conditions that currently exist in 2011. In addition, our industry is extremely competitive and our efforts at attempting to implement these initiatives may not result in increased revenues or improved profitability. If we are not able to increase our revenues or improve our profitability in the future, our business and results of operation would be adversely affected.

Results of Operations

Our operating results for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010 and ~~September~~March 2930, ~~2010~~ 2011 are expressed as a percentage of restaurant revenue below:

	13 Weeks Ended
	September 30, 2009			September 29, 2010
	March 31, 2010			March 30, 2011
Operating Statement Data:
Restaurant revenue		100.0	%		100.0	%
Product cost		3231.32			3130.26
Payroll and benefits		2627.16			2728.21
Depreciation and amortization		4.71			4.3.9
Other operating expenses		3637.95			3635.53
Operating income		76.49			79.72
Interest expense-net		14.26			1415.90
Other expense		0.0			0.0
Loss before provision for income taxes		(7.7	)		(5.8	)
Other income		0.0			0.0
Provision for income taxes		1.2			1.8
Loss before provision for income taxes		(6.8	)		(7.2	)
Net loss		(8.9	)		(7.6	)
Provision for income taxes		0.5			0.3
Net loss		(7.3	)		(7.6	)
Supplementary Operating Statement Data:
Restaurant other operating expense		24.78			2423.27
Franchise expense		1.56			1.87
General and administrative expense (1)		1011.71			109.59
Total other operating expenses		3637.95			3635.53

(1) General and administrative expenses as a percent of total operating revenue for ~~2009~~ ~~and~~the thirteen weeks ended March 31, 2010 and March 30, 2011 were 10.03% and 9.82%, respectively.

13 Weeks Ended ~~September~~March 2930, ~~2010~~2011 Compared to 13 Weeks Ended ~~September~~March 3031, ~~2009~~ 2010

Restaurant revenue ~~remained~~decreased ~~flat~~$1.0 atmillion, or 1.5%, to $6362.74 million for the 13 weeks ended ~~September~~March 2930, ~~2010 compared~~2011 tofrom $63.4 million for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010. ~~Adversely~~The ~~impacting restaurant revenue was a~~ decrease ~~of $0.7 million~~ in restaurant revenue ~~resulting~~ ~~from~~was amainly ~~1.1%~~due to the decrease in company-operated same-store sales ~~for~~of ~~the~~$1.1 ~~2010 period~~million, ~~from~~or ~~the 2009 period~~1.7%. Restaurants enter the comparable restaurant base for same-store sales the first full week after that restaurant’s fifteen-month anniversary. The components of the company-operated comparable sales decrease were ~~attributed~~comprised toof a decrease ~~transaction~~in ~~decrease~~the number of 2.transactions of 1.4%, and a check average ~~increase~~ decrease of 1.0.3%. The ~~Check~~company-operated ~~average~~same-store ~~increased~~transaction ~~and~~decrease ~~the~~reflects ~~number~~intense ofcompetition ~~transactions~~and ~~decreased~~a ingeneral ~~the third~~sales ~~quarter~~softness ofin ~~2010 compared to~~ the ~~third~~QSR ~~quarter~~industry ~~of 2009 mainly~~ due to ~~deeper discount~~high ~~promotions~~unemployment, in the ~~third~~recession ~~quarter~~and ofother ~~2009~~adverse ~~that~~economic ~~increased traffic~~ and ~~lowered~~ ~~check~~consumer ~~averages~~confidence infactors that ~~period.~~have ~~Company-operated same-store sales~~ continued toin be2011. The ~~impacted~~decrease ~~during~~in ~~the~~average ~~2010~~check ~~period~~was byprimarily ~~strong~~due ~~competition~~to ~~(mainly~~more ~~in discounts~~discounting ~~and~~on promotions) ~~and~~compared ~~a general sales softness in the QSR industry due~~ to ~~higher unemployment,~~ the ~~challenging~~2010 ~~economic~~period ~~environment~~ and ~~other~~lower ~~adverse economic~~menu ~~and~~prices ~~consumer~~on ~~confidence~~limited ~~factors~~time ~~which~~offers wecompared ~~expect~~ to ~~continue through~~ the ~~remainder~~ ofprior ~~2010~~year ~~and~~comparable ~~possibly into 2011~~period. The ~~Another~~decrease ~~component~~in ~~of decreased~~ restaurant revenue ~~were~~was ~~the~~also due to lost sales of approximately $0.61 million from the closure of ~~one and~~ three company-operated restaurants in ~~2009 and~~ 2010, ~~respectively,~~ of which one was managed by EPL through a management agreement with a franchisee. These decreases were partially offset by $0.92 million of revenue from ~~four~~one ~~restaurants~~new ~~purchased from~~restaurant ~~a franchisee in September 2009 and $0.4 million of revenue from three restaurants~~ opened in fiscal ~~2009~~year ~~that~~2010 ~~are~~ not ~~part~~yet ofin the ~~company-operated same-~~comparable store ~~sales~~ base.

Franchise revenue decreased $0.32 million, or 63.4%, to $4.54 million for the 13 weeks ended ~~September~~ 29March 30, ~~2010~~2011 from $4.86 million for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010. This decrease is ~~due~~ primarily due to lower ~~franchise~~royalties ~~development fee income~~ of $0.2 1 million, ~~and~~ lower ~~royalties~~franchise development fees of $0.1 million. ~~The~~and lower ~~franchise~~rental ~~development fee~~ income isof ~~mainly attributable to the~~ $0.21 million. These ofdecreases ~~income~~were ~~recognized~~partially inoffset ~~the~~by ~~13 weeks~~higher ~~ended~~franchise ~~September~~point-of-sale ~~30,~~help ~~2009~~desk ~~due~~revenue toof a$0.1 ~~termination~~million. Royalty ofand ~~one~~percentage ~~franchise~~rent ~~development agreement. Royalties~~income, which are both based on sales, were ~~slightly~~ lower due to a 3.0% decrease in franchise-operated same-store sales for the ~~2010~~13 ~~period~~weeks ~~from the~~ended ~~2009~~March ~~period.~~30, 2011. Franchise-operated same-store sales were impacted by the same adverse factors that affected company-operated same-store sales described above. ~~Additionally,~~ The ~~franchise~~decrease ~~revenue~~in ~~for~~franchise ~~the~~development ~~third~~fees ~~quarter of 2010~~ was ~~adversely impacted~~due byto ~~the~~one ~~closure~~fewer ofdevelopment agreement ~~one~~being ~~franchise~~terminated ~~unit~~ in ~~each~~the of2011 ~~the~~period ~~first~~compared ~~two~~to ~~quarters of~~the 2010 ~~and~~period. Franchise ~~eight~~point-of-sale ~~franchise~~help ~~unit~~desk ~~closures~~revenue inincreased ~~the~~due ~~third~~primarily ~~quarter~~to ofadditional ~~2009.~~franchise ~~The decrease~~stores inconverting ~~royalty revenue due~~ to ~~closed~~the ~~units~~same ~~was~~point-of-sale ~~partially~~system ~~offset~~used by ~~two franchise~~company-operated ~~stores~~restaurants. Additionally ~~opening~~impacting in the ~~third~~decrease ~~quarter~~in offranchise ~~2009~~revenue ~~and~~was ~~one~~the ~~new restaurant~~closure ~~opening~~of in5 ~~each~~franchised ofrestaurants during the ~~second~~13 ~~and~~weeks ~~third~~ended ~~quarters~~March ~~of 2010~~30, ~~respectively~~ 2011.

2321

Product costs decreased $0.7 million, or 3.25%, to $19.91 million for the 13 weeks ended ~~September~~ 29March 30, ~~2010~~2011 from $2019.68 million for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010. This decrease is a result of a $0.45 million net reduction in food cost and a $0.32 million decrease in non-ingredient items during the ~~2010~~2011 period compared to the ~~2009~~2010 period. The net food cost decrease was mainly due to lower beef costs ~~for: chicken~~ of $01.90 million, ~~rice~~and ofoverall $0lower sales.1 This ~~million~~decrease ~~and~~was ~~beans~~partially offset by higher food costs of approximately $0.16 million. ~~These~~for ~~lower commodity~~non-beef ~~costs~~food ~~were~~items ~~partially~~of ~~offset~~which bychicken awas $0the main component of this increase.7 The ~~million~~decrease in beef costs and the corresponding increase in ~~steak~~chicken ~~cost~~ costs were mainly due to ~~adding~~removing ~~this~~steak ~~additional~~from ~~protein~~the menu in ~~2010.~~the first quarter of 2011, thus creating a larger menu mix percentage for chicken products. The non-ingredient costs decrease was mainly due to certain contracts for packaging items that were renewed innear the end of the first quarter of 2010 with favorable pricing ~~compared to the prior year~~.

Product cost as a percentage of restaurant revenue was 3130.26% for the 13 weeks ended ~~September~~ 29March 30, ~~2010~~2011 compared to 3231.32% for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010. This decrease ~~resulted~~was ~~primarily~~largely ~~from~~driven ~~lower~~by ~~food~~the ~~and~~removal ~~non-ingredient~~of ~~costs discussed~~steak ~~above~~products ~~and~~from ~~less~~the ~~discounting~~menu in the ~~current~~first ~~period~~quarter of 2011 which generally carried a higher food cost percentage compared to our chicken products. ~~The~~ These decreases in product costs as a percentage of restaurant revenue were partially offset by ~~the~~ ~~introduction~~higher discounting in the ~~first~~2011 ~~quarter~~period ofas ~~2010~~compared ofto ~~our~~the ~~steak~~2010 ~~products which have lower gross margins than our overall chicken products~~period.

Payroll and benefit expenses ~~increased~~remained ~~$0.7~~relatively ~~million,~~flat orat ~~4.4%, to~~ $17.36 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 ~~from~~compared to $1617.65 million for the 13 weeks ended ~~September~~ 30March 31, ~~2009~~2011. This slight increase was primarily athe result of a $0.63 million ~~in higher workers’ compensation insurance expense in 2010 compared to the 2009 period as we experienced an~~ increase in ~~the~~group ~~current~~health ~~quarter~~insurance incosts ~~the~~due ~~number of workers’ compensation claims and there were reductions~~ to ~~the workers’ compensation reserves in the prior year period. Due to~~ increased medical claims in. This ~~the~~increase ~~current~~was ~~quarter,~~partially ~~our~~offset ~~health~~by ~~insurance~~lower labor costs ~~increased~~of byapproximately $0.42 million ~~in the 2010 period compared to the 2009 period~~. The ~~These increases were partially offset by~~ lower labor costs ofwere ~~$0.2~~mainly ~~million~~ due to ~~improved labor scheduling and~~ lower ~~bonuses of $0~~sales.~~1 million.~~

As a percentage of restaurant revenue, payroll and benefit costs increased 10.15% to 27 28.21% for the ~~2010~~2011 period from 2627.16% for the ~~2009~~2010 period mainly due to the ~~reason~~ ~~mentioned~~decrease ~~above~~in restaurant revenue and the relatively fixed nature of management costs coupled with the increase in group health insurance costs.

Depreciation and amortization decreased approximately $0.32 million or 85.6%, to $32.04 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 from $2.76 million for the 13 weeks ended ~~September~~ 30March 31, ~~2009~~2010. This decrease was mainly attributed to a portion of our point of sale equipment in our restaurants being fully depreciated ~~and no longer having amortization of our franchise network intangible asset that was fully impaired in 2009~~. ~~These decreases were partially offset by depreciation from additional restaurants opened during the latter part of 2009.~~

Depreciation and amortization as a percentage of restaurant revenue decreased to 4.3.9% for the 13 ~~weeks~~2011 ~~ended~~period ~~September 29, 2010~~ compared with 4.71% for the 132010 ~~weeks~~period ~~ended September 30, 2009~~ mainly due to the ~~reasons~~reason noted above.

Other operating expenses include restaurant other operating expense, franchise expense, and general and administrative expense.

Restaurant other operating expense, which includes utilities, repair and maintenance, advertising, property taxes, occupancy and other operating expenses, decreased $0.39 million, or 15.85%, to $1514.49 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~ 2011 from $15.7 million for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010. This decrease is ~~mainly~~was ~~attributed~~primarily due a $0.6 million decrease in advertising expenses. This decrease was due to significant marketing activity incurred in the ~~reasons~~2010 ~~noted~~period ~~below~~due to the rollout of the new steak products which we subsequently removed from the menu in the 2011 period.

Restaurant other operating expense as a percentage of restaurant revenue decreased to 2423.27% for the ~~2010~~2011 period from 24.78% for the ~~2009~~2010 period. ~~The decrease was~~ primarily ~~due~~ to lower general liability insurance expense of $0.3 million as a result of an overall reduction in the number of general liability claims. Additionally, expenses for restaurant operating supplies decreased $0.1 million due to ~~timing of purchases and a $0.1 million decrease in pre-opening expenses which was due to no new stores opening in~~ the ~~third~~cost ~~quarter~~reduction ofnoted ~~2010~~above ~~compared to two new store openings~~ and ~~four units that transferred from a franchisee to the company in the third quarter of 2009. These decreases were~~ partially offset by ~~higher~~lower ~~natural gas~~restaurant ~~and electricity expenses of $0~~revenue.~~2 million due primarily to increased rates.~~

Franchise expense consists primarily of rent expense that we pay to landlords associated with leases under restaurants we are subleasing to franchisees. This expense usually fluctuates primarily as subleases expire and to some degree based on rents that are tied to a percentage of sales calculation. Franchise expense was relatively flat at $1.20 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~ 2011.

General and administrative expense decreased $0.29 million, or 212.23%, to $6.61 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 from $67.80 million for the 13 weeks ended ~~September~~ 30March 31, ~~2009~~2010. The decrease was primarily attributed to athe ~~decrease~~following incost ~~restaurant asset~~decreases: ~~impairment~~$0.9 ~~charges~~million in ~~the~~closed ~~2010~~store ~~period~~reserve ofexpenses, $1.0.3 million ~~from~~decrease ~~the~~in ~~2009~~equity ~~period and~~compensation aexpense and $0.2 million decrease in ~~severance~~legal ~~expense~~expenses. These decreases were partially offset by acost increases of $0.53 million ~~increase~~ in ~~outside~~severance ~~consulting~~expenses ~~services,~~and a $0.2 million ~~increase~~ in ~~the~~group ~~closed~~medical insurance expense. The decrease in close store reserve ~~for~~expenses was due to the closure of one ~~store~~company-owned ~~that~~restaurant ~~was~~and the write-off of two unopened restaurants during the 2010 period. There were no company-owned restaurants closed in the ~~third quarter~~13 ofweeks ~~2010,~~ended aMarch $030, 2011.2 The ~~million~~decrease ~~increase~~ in equity compensation expense was mainly due to forfeitures of equity awards related to the ~~corporate~~departure ~~bonus~~of ~~accrual~~one ~~and~~ of our executive officers during the 2011 period. The decrease in legal expenses was due to higher ~~health~~legal ~~insurance~~expenses ~~costs~~incurred in the 2010 period due to settling of $0multiple cases.1 The ~~million~~increase in severance expense was mainly due to ~~increased~~the departure of one of our executive officers during the 2011 period. The increase in group medical ~~claims~~ insurance was driven by higher medical claim activity.

General and administrative expense as a percentage of total revenue decreased 01.21% to 9.82% for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 from 10.03% for the 13 weeks ended ~~September~~ 30March 31, ~~2009~~2010. The decrease was due to the reduced general and administrative expense noted above and partially offset by lower restaurant revenue.

2422

Interest expense, net of interest income, increased slightly by $0.42 million, or 41.83%, to $9.5 4 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~ 2011 from $9.12 million for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010.

Despite having a loss for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 and ~~September~~March 30, ~~2009~~2010, we had an income tax provision of $01.21 million and $0.37 million, respectively primarily related to the effect of changes in our deferred taxes and the related effect of maintaining a full valuation allowance against certain of our deferred tax assets as of ~~September~~March 2930, ~~2010~~2011.

As a result of the factors noted above, we had a net loss of $4.87 million for the 13 weeks ended ~~September~~March 2930, ~~2010~~2011 compared to a net loss of $45.6 million for the 13 weeks ended ~~September~~March 3031, ~~2009~~2010.

Our operating results for the 39 weeks ended September 30, 2009 and September 29, 2010 are expressed as a percentage of restaurant revenue below:

	39 Weeks Ended
	September 30, 2009			September 29, 2010
Operating Statement Data:
Restaurant revenue		100.0	%		100.0	%
Product cost		32.3			31.2
Payroll and benefits		26.5			27.0
Depreciation and amortization		4.4			4.1
Other operating expenses		37.5			36.3
Operating income		6.5			8.5
Interest expense-net		11.9			14.4
Other expense		0.2			0.0
Other income		(0.2	)		0.0
Loss before provision for income taxes		(5.4	)		(5.9	)
Provision for income taxes		10.1			0.5
Net loss		(15.4	)		(6.4	)
Supplementary Operating Statement Data:
Restaurant other operating expense		23.6			24.0
Franchise expense		1.5			1.6
General and administrative expense (1)		12.4			10.7
Total other operating expenses		37.5			36.3

(1) General and administrative expenses as a percent of total operating revenue for 2009 and 2010 were 11.6% and 10.0%, respectively.

39 Weeks Ended September 29, 2010 Compared to 39 Weeks Ended September 30, 2009

Restaurant revenue decreased $3.7 million, or 1.9%, to $193.7 million for the 39 weeks ended September 29, 2010 from $197.4 million for the 39 weeks ended September 30, 2009. This decrease was primarily due to a reduction of $6.4 million in restaurant revenue resulting from a 3.3% decrease in company-operated same-store sales for the 2010 period from the 2009 period. Restaurants enter the comparable restaurant base for same-store sales the first full week after that restaurant’s fifteen-month anniversary. The components of the company-operated comparable sales decrease were attributed to a transaction decrease of 7.0%, and a check average increase of 4.0%. Check average increased and the number of transactions decreased in the first 39 weeks of 2010 compared to the first 39 weeks of 2009 mainly due to deeper discount promotions in the first 39 weeks of 2009 that increased traffic and lowered check averages in that period. The decrease was also due to lost sales of $0.8 million and $1.1 million from the closure of one and three company-operated restaurants in 2009 and 2010, respectively, of which one was managed by EPL through a management agreement with a franchisee. These decreases were partially offset by $1.7 million of revenue from seven restaurants opened in fiscal 2008 and 2009 not yet in the comparable store base and also by $2.9 million of revenue from four restaurants purchased from a franchisee in September 2009.

Franchise revenue decreased $0.6 million, or 4.2%, to $13.8 million for the 39 weeks ended September 29, 2010 from $14.4 million for the 39 weeks ended September 30, 2009. This decrease is due primarily to lower royalties of $0.6 million and percentage rent income of $0.2 million partially offset by higher franchise development fee income of $0.2 million in the 2010 period compared to the 2009 period. Royalty and percentage rent income, which are both based on sales, were lower due to a 5.7% decrease in franchise-operated same-store sales for the 2010 period from the 2009 period. Franchise-operated same-store sales were impacted by the same adverse factors that affected company-operated same-store sales described above. Additionally, franchise revenue was negatively impacted by the closure of two and ten franchise units in the 39 weeks of 2010 and in 2009, respectively and which negative impact was partially offset by the five openings in the 2009 period and two openings in the 2010 period, respectively.

Product costs decreased $3.2 million, or 5.1%, to $60.5 million for the 39 weeks ended September 29, 2010 from $63.7 million for the 39 weeks ended September 30, 2009. This decrease resulted primarily from the decline in company-operated restaurant revenue in the 2010 period compared to the 2009 period along with lower costs of chicken, rice and beans. We experienced a net decrease of a $2.2 million in food cost and a $1.0 million decrease in non-ingredient items during the 2010 period compared to the 2009 period. The food cost decrease was comprised of chicken reduction of $4.5 million, rice reduction of $0.4 million and beans reduction of $0.2 million and other food items of $0.5 million. These reductions were partially offset by a $3.0 million increase in steak cost due to adding this additional protein in the first quarter of 2010 and higher tomato costs of $0.4 million. Non-ingredient costs decreased $1.0 million due to certain contracts for packaging items that were renewed in the first quarter of 2010 with favorable pricing compared to the prior year.

Product cost as a percentage of restaurant revenue was 31.2% for the 39 weeks ended September 29, 2010 compared to 32.3% for the 39 weeks ended September 30, 2009. This decrease resulted primarily from lower food and non-ingredient costs discussed above and less discounting in the current period. The decreases in product costs as a percentage of restaurant revenue were partially offset by the introduction of our steak products in 2010 which have lower gross margins than our overall chicken products.

Payroll and benefit expenses decreased $0.1 million, or 0.2%, to $52.3 million for the 39 weeks ended September 29, 2010 from $52.4 million for the 39 weeks ended September 30, 2009. The payroll decrease of approximately $0.6 million was primarily a result of needing fewer employees to support the lower sales volume for the 2010 period along with some enhancements we made to our labor scheduling, which savings were partially offset by the costs incurred as a result of four new restaurants opened and four acquired restaurants in 2009 and the additional labor costs required to train our restaurant employees for our new steak roll-out in January 2010. These payroll decreases were partially offset by higher workers’ compensation expense of $0.3 million and higher health insurance costs of $0.2 million.

As a percentage of restaurant revenue, payroll and benefits expense increased 0.5% to 27.0% for the 2010 period from 26.5% for the 2009 period due to the decrease in restaurant revenue and relatively fixed nature of restaurant management costs, increased training and the other factors mentioned above.

Depreciation and amortization decreased $0.7 million, or 8.1%, to $8.0 million for the 39 weeks ended September 29, 2010 compared to $8.7 million for the 39 weeks ended September 30, 2009. This decrease was mainly attributed to a portion of our point of sale equipment in our restaurants becoming fully depreciated and no longer having amortization expense of our franchise network intangible asset that was fully impaired in 2009. These decreases were partially offset by new restaurants opened.

Depreciation and amortization as a percentage of restaurant revenue decreased to 4.1% for the 39 weeks ended September 29, 2010 compared with 4.4% for the 39 weeks ended September 30, 2009 mainly due to the reasons noted above.

Other operating expenses include restaurant other operating expense, franchise expense, and general and administrative expense.

Restaurant other operating expense, which includes utilities, repair and maintenance, advertising, property taxes, occupancy and other operating expense, decreased $0.3 million or 0.6% to $46.4 million for the 39 weeks ended September 29, 2010 compared to $46.7 million for the 39 weeks ended September 30, 2009. The decrease is mainly attributed to a decrease in general liability insurance expense of $0.4 million as a result of an overall reduction in the number of general liability claims, lower pre-opening store expenses due to fewer new store openings of $0.4 million and lower advertising expense of $0.3 million. Advertising expense each period may be above or below our planned annual rate of 4% of revenue, depending on the timing of marketing promotions and the relative weights of advertising and prices of media spending. These decreases were partially offset by increases in the cost of natural gas and electricity of $0.5 million and increases in repairs and maintenance expenses of $0.3 million.

Restaurant other operating expense as a percentage of restaurant revenue increased to 24.0% for the 2010 period from 23.6% for the 2009 period. The percentage increase was mainly due to the combination of lower sales and increases in certain expenses when expressed as a percentage of restaurant revenue such as occupancy which increased 0.2% as a percentage of restaurant revenue and an increase in repairs and maintenance of 0.2% as a percentage of restaurant revenue, and an increase in the cost of natural gas and electricity of 0.3% as a percentage of restaurant revenue. These increases were partially offset by lower general liability insurance expense of 0.2% of restaurant revenue, lower store pre-opening expenses of 0.2% of restaurant revenue and lower advertising expense of 0.1% of restaurant revenue.

Franchise expense consists primarily of rent expense that we pay to landlords associated with leases under restaurants we are subleasing to franchisees. This expense usually fluctuates primarily as subleases expire and to some degree based on rents that are tied to a percentage of sales calculation. Franchise expense was relatively flat at $3.1 million for the 39 weeks ended September 29, 2010.

General and administrative expense decreased $3.8 million, or 15.3%, to $20.7 million for the 39 weeks ended September 29, 2010 from $24.5 million for the 39 weeks ended September 30, 2009. The decrease was mainly attributed to a decrease in legal settlements of $2.9 million, a decrease in restaurant asset impairment of $1.7 million and a decrease in wages and severance of $0.8 million. These decreases were partially offset by a $1.1 million increase in our closed store reserve for two stores we closed in 2010 and two stores which we did not open and $0.5 million increase in outside consulting services.

General and administrative expense as a percentage of total revenue decreased 1.6% to 10.0% for the 39 weeks ended September 29, 2010 from 11.6% for the 39 weeks ended September 30, 2009. The decrease was mainly due to the decline in the relative amounts spent during the periods, which decline was partially offset by the decline in revenue, in each case for the reasons noted above.

Interest expense, net of interest income, increased $4.5 million, or 19.1%, to $28.0 million for the 39 weeks ended September 29, 2010 from $23.5 million for the 39 weeks ended September 30, 2009. Due to issuing $132.5 million aggregate principal amount of 11¾% senior secured notes in May, 2009 and paying off our 2009 senior secured notes our average debt balances for the 39 weeks ended September 29, 2010, increased to $268.5 million compared to $254.5 million for the 39 weeks ended September 30, 2009. Our average interest rate increased to 12.61% for the 39 weeks ended September 29, 2010 compared to 10.10% for the 2009 period primarily due to the debt refinancing mentioned above.

The Company had $0.4 million in other expense in the 2009 period related to the change in the fair value of the interest rate swap agreement. The fixed interest rate that the Company agreed to pay was higher than the floating rate estimated for the life of the agreement. The Company terminated the interest rate swap agreement in the second quarter of 2009.

The Company had $0.5 million in other income in the 2009 period attributed to a net gain on the repurchase of a portion of the 2013 notes. This gain was net of the portion of the deferred finance costs associated with the notes. No bonds were repurchased in the first 39 weeks of 2010.

Despite having a loss for the 39 weeks ended September 29, 2010, we had an income tax provision of $1.0 million, primarily related to the effect of changes in our deferred taxes and the related effect of maintaining a full valuation allowance against certain of our deferred tax assets as of September 29, 2010. For the 39 weeks ended September 30, 2009, we had an income tax provision of $19.8 million as we recorded a valuation allowance against our deferred tax assets and the effect of changes in our deferred taxes.

As a result of the factors noted above, we had a net loss of $12.5 million for the 39 weeks ended September 29, 2010 compared to a net loss of $30.4 million for the 39 weeks ended September 30, 2009.

Liquidity and Capital Resources

Our principal liquidity requirements are to service our debt and meet our capital expenditure needs. At ~~September~~March 2930, ~~2010~~2011, our total debt, ~~was~~including ~~$268.7~~obligations ~~million, compared~~under tocapital leases, was $~~268~~269.23 million ~~at December 30, 2009~~. In ~~Assuming we do not repurchase any of the outstanding 2014 bonds, in~~ May 2011 Intermediate is required to make a mandatory redemption of a portion of our 2014 Notes (as defined below) at an estimated cost of approximately $10.6 million along with the interest payment that will then be due. See “Debt and Other Obligations” below. Our ability to make payments on our indebtedness and to fund planned capital expenditures will depend on our available cash and our ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations, we believe our cash flow from operations, available cash of $1210.13 million at ~~September~~March 2930, ~~2010~~2011, available borrowings under our credit facility (which availability was approximately $6.1 million at ~~September~~March 2930, ~~2010~~ 2011), and funds from Chicken Acquisition Corp. (“CAC”) will be adequate to meet our liquidity needs for the next 12 months. Under the covenants governing our outstanding Notes, EPL is limited on the amount that it can distribute to Intermediate, including amounts that Intermediate could use to fund its debt service. Intermediate is a wholly-owned subsidiary of El Pollo Loco Holdings, Inc., which is a wholly owned indirect subsidiary of CAC. Our results of operations as well as current economic and constrained liquidity conditions could make it more difficult or costly for us to obtain additional debt financing or to refinance our existing debt when it becomes necessary (assuming such financing is then available to the Company), or could otherwise make alternative sources of liquidity or financing costly or unavailable. See “Debt and Other Obligations”.

In the 39 13 week period ended ~~September~~March 2930, ~~2010~~2011, our capital expenditures totaled $50.3 7 million, consisting mainly of $30.~~1 million for restaurant image “refreshes”, $1.~~4 million for capitalized repairs of existing sites, $0.72 million for point of sale upgrades and corporate information technology enhancements and $0.1 million ~~for~~on construction of a new unit ~~under~~that ~~construction~~opened in December 2010. We currently expect our aggregate capital expenditures for ~~2010~~2011 to be approximately $65.0 million to $76.0 million ~~in light of a reduced number of expected new store openings in 2010 compared to prior years and increased restaurant image “refreshes” in 2010~~.

27Cash and cash equivalents, including restricted cash, increased $4.8 million from $5.5 million at December 29, 2010, to $10.3 million at March 30, 2011. See “Working Capital and Cash Flows” below for information explaining this increase. We cannot provide assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to EPL under EPL’s senior secured credit facility in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity and capital needs. If we acquire additional restaurants from franchisees, our debt service requirements could increase. In addition, we may fund restaurant openings through credit received by trade suppliers and landlord contributions. If our cash flow from operations is inadequate to meet our obligations under our indebtedness we may need to refinance all or a portion of our indebtedness, including the notes, on or before maturity. As of the date of this filing, we are beginning to explore alternatives we may have to opportunistically refinance our existing debt from a variety of sources. Such refinancing may not be completed for a number of factors. Our results of operations as well as current economic and constrained liquidity conditions could make it more difficult or costly for us to obtain such alternative financing or to obtain additional debt financing or to refinance our existing debt, in the near term or when it becomes necessary, and could otherwise make alternative sources of liquidity or financing costly or unavailable. We cannot provide assurance that we will be able to refinance any of our indebtedness, if desirable or necessary, on commercially reasonable terms or at all. See “Debt and Other Obligations”.

~~Cash~~As ~~and cash~~discussed ~~equivalents,~~in ~~including~~Note ~~restricted cash~~8, ~~increased~~Commitments ~~$0.8~~and ~~million~~Contingencies ~~from~~in ~~$11.4 million~~our atcondensed ~~December~~consolidated 30financial statements, ~~2009~~we toare ~~$12.2~~involved ~~million~~in atvarious ~~September 29~~lawsuits, ~~2010.~~and ~~See “Working~~settled ~~Capital~~several ~~and~~including ~~Cash~~wage ~~Flows”~~and ~~below~~hour ~~for~~class ~~information~~action ~~explaining~~lawsuits. ~~this~~In ~~increase. We~~order ~~cannot~~to ~~provide~~mitigate ~~assurance~~the ~~that~~adverse ~~our~~effects ~~business~~of ~~will~~these ~~generate~~cases, ~~sufficient~~such ~~cash~~as ~~flow from~~on-going ~~operations~~legal orexpense, ~~that~~diversion ~~future~~of ~~borrowings~~management ~~will~~time, beand ~~available~~the torisk ~~EPL~~of ~~under~~a ~~EPL’s senior~~substantial ~~secured~~judgment ~~credit~~against ~~facility~~us in(which ancould ~~amount~~occur ~~sufficient~~even toif ~~enable~~we usbelieve towe ~~service our~~have ~~indebtedness~~a orstrong tolegal ~~fund~~basis for our ~~other~~position), ~~liquidity~~we have in the past, and ~~capital~~may ~~needs~~in the future, settle these cases. IfAny wesubstantial ~~acquire additional~~settlement ~~restaurants~~payments ~~from~~or ~~franchisees,~~damage ~~our~~awards ~~debt~~against ~~service~~us ~~requirements~~if ~~could increase.~~the Incases ~~addition,~~go weto ~~may~~trial ~~fund~~could ~~restaurant~~have ~~openings~~a ~~through~~material ~~credit~~adverse ~~received by~~effect ~~trade~~on ~~suppliers~~our liquidity and ~~landlord~~financial ~~contributions~~condition. IfIn ~~our~~fiscal ~~cash~~2010 ~~flow~~we ~~from~~paid ~~operations is~~$9.2 ~~inadequate~~million to ~~meet~~settle ~~our~~various ~~obligations~~lawsuits. These ~~under~~payments ~~our~~were ~~indebtedness~~partially weoffset ~~may~~by ~~need~~a ~~to refinance~~$4.5 ~~all~~million orsettlement apayment ~~portion~~we ofreceived ~~our~~in ~~indebtedness,~~February ~~including~~2010. As ~~the~~of ~~notes~~March 30, on2011, ~~or before~~we ~~maturity~~have $1.9 Wemillion ~~cannot~~remaining ~~provide~~to ~~assurance~~be ~~that~~paid weon ~~will~~these belawsuits ~~able~~which tois ~~refinance any~~expected ofto ~~our~~be ~~indebtedness,~~paid ifno ~~necessary,~~later onthan ~~commercially~~May ~~reasonable~~20, ~~terms or at all~~2011.

As discussed in Note 8, Commitments and Contingencies in our condensed consolidated financial statements, we are involved in various lawsuits, including wage and hour class action lawsuits. In order to mitigate the adverse effects of these cases, such as on-going legal expense, diversion of management time, and the risk of a substantial judgment against us (which could occur even if we believe we have a strong legal basis for our position), we have in the past, and may in the future, settle these cases. Any substantial settlement payments or damage awards against us if the cases go to trial could have a material adverse effect on our liquidity and financial condition. In fiscal 2009 we agreed to settle various lawsuits for payments totaling $10.4 million of which $8.7 million were made during the 39 weeks ended September 29, 2010. These payments were partially offset by a $4.5 million settlement award we received in February 2010. As of September 29, 2010, we have $2.7 million remaining to be paid on these lawsuits.23

As a holding company, the stock of EPL constitutes our only material asset. EPL conducts all of our consolidated operations and owns substantially all of our consolidated operating assets. Our principal source of the cash required to pay our obligations is the cash that EPL generates from its operations. EPL is a separate and distinct legal entity, has no obligation to make funds available to Intermediate and currently has restrictions that limit distributions or dividends to be paid by EPL to Intermediate. Furthermore, subject to certain restrictions, EPL is permitted under the terms of EPL’s senior secured credit facilities and the indentures governing the 2012 Notes, 2013 Notes and 2014 Notes to incur additional indebtedness that may severely restrict or prohibit EPL from making distributions or loans, or paying dividends, to Intermediate. If we are unable to obtain cash from EPL or other sources, we will not be able to meet our debt and other obligations. For the cash interest ~~payment~~payments of approximately $2.1 million that was due on May 15, 2010 and on November 15, 2010 for the 2014 Notes, EPL made a cash dividend distribution to Intermediate to cover ~~this~~these interest ~~payment.~~ payments. As mentioned elsewhere herein, EPL may or may not make future funds available to Intermediate to service its debt. EPL is restricted in the amount of distributions, payments or dividends that it may make. As of March 30, 2011, the remaining amount EPL is allowed to fund Intermediate under its restrictive covenants is approximately $0.8 million. CAC and EPL intend to provide the funds required to enable Intermediate to make the $10.6 million redemption payment and interest that is due on May 15, 2011for the 2014 Notes.

Working Capital and Cash Flows

We presently have, in the past have had, and may have in the future, negative working capital balances. The working capital deficit principally is the result of our interest payments, lower sales and capital expenditures. We are able to operate with a substantial working capital deficit mainly because (1) restaurant revenues are received primarily on a cash or near-cash basis with a low level of accounts receivable, (2) rapid turnover results in a limited investment in inventories and (3) accounts payable for food and beverages usually become due after the receipt of cash from the related sales. As a result, funds from cash sales and franchise revenue not immediately needed to pay for food and supplies typically have been used for capital expenditures and/or debt service payments. We expect our negative working capital balances to continue to increase ~~for~~through ~~the remainder~~2011 ~~of 2010~~ based on the interest payments that are due, the ~~continuation~~ continuing effects of the recent economic downturn and ~~its impact on~~ our ~~results of operations and our~~ plan to ~~only~~continue to open one or two new ~~restaurant~~restaurants in ~~the fourth quarter of 2010~~2011.

During the 3913 weeks ended ~~September~~March 2930, ~~2010~~2011, our cash and cash equivalents, including restricted cash, increased by $04.8 million to $1210.23 million from the ~~period~~ fiscal year ended December 3029, ~~2009~~2010. This increase was ~~primarily~~ due to an $85.06 million ~~increase~~ in ~~accrued interest, $4.5 million in~~ cash ~~received~~provided ~~from~~by aoperating ~~settlement award~~activities, ~~$1.4 million net amount collected on accounts receivable and $1.2 million favorable change in prepaid assets and accrued insurance accounts,~~ partially offset by ~~legal~~capital ~~settlement~~expenditures ~~payments~~ of $80.7 million, ~~$5.3~~and ~~million~~payments ~~used~~on ~~for~~ capital ~~expenditures~~lease obligations and ~~$0.3~~repurchase ~~million~~ of ~~capital~~common ~~lease~~stock ~~payments.~~of ~~The~~ $20.~~3 million~~1 decline in capital expenditures for the 39 week period ended September 29, 2010 compared to comparable period in 2009 was mainly due to decreased spending on new restaurants as we concentrated on “refreshing” the majority of our unitsmillion.

Debt and Other Obligations

Credit Facility

On May 22, 2009, EPL entered into a credit agreement (the “Credit Facility”) with Intermediate as guarantor, Jefferies Finance LLC, as administrative and syndication agent, and the various lenders. OnIn October 21, 2010, the credit facility was assigned from Jefferies Finance LLC to GE Capital ~~LLC.~~Financial, Inc. The terms and conditions of the credit facility remain essentially the same. The Credit Facility provides for a $12.5 million revolving line of credit with borrowings (including obligations in respect of revolving loans and letters of credit) limited at any time to the lesser of (i) $12.5 million ~~and~~or (ii) the Company’s consolidated cash flow for the most recently completed trailing twelve consecutive months and, in no event, shall obligations in respect of letters of credit exceed an amount equal to $10.0 million. EPL has $6.4 million of letters of credit outstanding under the Credit Facility as of ~~September~~March 2930, ~~2010~~ 2011.

28The Credit Facility bears interest, payable monthly, at an Alternate Base Rate or LIBOR, at EPL's option, plus an applicable margin. The applicable margin rate is 5.50% with respect to LIBOR and 4.50% with respect to Alternate Base Rate advances. The Credit Facility is secured by a first priority lien on substantially all of the Company’s assets and is guaranteed by Intermediate. The Credit Facility matures on July 22, 2012.

The Credit Facility ~~bears~~contains ~~interest,~~a ~~payable~~number ~~quarterly~~of covenants that, atamong another ~~Alternate~~things, ~~Base~~restrict, ~~Rate~~subject ~~or LIBOR~~to certain exceptions, atthe ~~EPL'~~Company’s ~~option~~ability to (i) incur additional indebtedness or issue preferred stock; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) sell assets; (v) make certain restricted payments; (vi) make investments, ~~plus~~loans anor ~~applicable~~advances; ~~margin.~~(vii) ~~The~~make ~~applicable~~certain ~~margin~~acquisitions; ~~rate~~(viii) ~~is 5.50%~~engage in certain transactions with ~~respect~~affiliates; to(ix) ~~LIBOR~~change ~~and~~the ~~4.50%~~Company’s ~~with~~lines ~~respect~~of tobusiness ~~Alternate~~or ~~Base~~fiscal ~~Rate advances~~year; and (x) engage in speculative hedging transactions. ~~The~~In addition, the Credit ~~Facility~~Agreement iswill ~~secured~~require bythe Company to maintain, on a ~~first~~consolidated ~~priority~~basis, ~~lien~~a ~~on substantially~~minimum level of consolidated cash flow at all times. As of March 30, 2011, the Company’s ~~assets~~was ~~and~~in iscompliance ~~guaranteed~~with byall ~~Intermediate.~~of ~~The~~ the financial covenants contained in the Credit Facility, ~~matures~~had onno ~~July~~borrowings ~~22,~~outstanding ~~2012~~under the Credit Facility and had $6.1 million available for borrowings under the Credit Facility.

The Credit Facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to (i) incur additional indebtedness or issue preferred stock; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) sell assets; (v) make certain restricted payments; (vi) make investments, loans or advances; (vii) make certain acquisitions; (viii) engage in certain transactions with affiliates; (ix) change the Company’s lines of business or fiscal year; and (x) engage in speculative hedging transactions. In addition, the Credit Agreement will require the Company to maintain, on a consolidated basis, a minimum level of consolidated cash flow at all times. As of September 29, 2010, the Company was in compliance with all of the financial covenants contained in the Credit Facility and had $6.1 million available for borrowings under the revolving line of credit.24

2012 Notes

On May 22, 2009, EPL issued $132.5 million aggregate principal amount of 11 3/4% senior secured notes due December 1, 2012 (the “2012 Notes”) in a private placement. EPL sold the 2012 Notes at an issue price equal to 98.0% of the principal amount, resulting in gross proceeds to EPL of $129.9 million before expenses and fees. Interest is payable each year in June and December beginning December 1, 2009. The 2012 Notes are guaranteed by Intermediate and are secured by a second priority lien on substantially all of the Company’s assets. The 2012 Notes may be redeemed at a premium, at the discretion of EPL, after March 1, 2011, or sooner in connection with certain equity offerings. If EPL undergoes certain changes of control, each holder of the notes may require EPL to repurchase all or a part of its notes at a price of 101% of the principal amount. The Indenture governing the 2012 Notes contains a number of covenants that, among other things, restrict, subject to certain exceptions, EPL’s ability to incur additional indebtedness; pay dividends or certain restricted payments (including distributions to Intermediate); make certain investments; sell assets; create liens; merge; and enter into certain transactions with its affiliates. As of ~~September~~March 2930, ~~2010~~2011, we had $~~130~~131.92 million outstanding in aggregate principal amount under our 2012 Notes. The principal value of the 2012 Notes will increase (representing accretion of original issue discount) from the date of original issuance so that the accreted value of the 2012 Notes will be equal to the full principal amount of $132.5 million at maturity.

EPL incurred direct finance costs of approximately $9.2 million in connection with sale of the 2012 Notes and the registration of these notes. These costs have been capitalized and are included in other assets in the Company’s condensed consolidated balance sheets, and the related amortization is reflected as a component of interest expense in the condensed consolidated statements of operations. The Company used the net proceeds from the 2012 Notes to repay certain indebtedness of the Company.

As of ~~September~~ 29March 30, ~~2010~~2011, we calculated our “fixed charge coverage ratio” (as defined in the indenture governing the 2012 Notes) at 1:1903 to 1:00. The indenture permits EPL to incur indebtedness or issue disqualified stock, and the EPL’s restricted subsidiaries to incur indebtedness or issue preferred stock, and EPL to make dividend and other restricted payments to Intermediate, if, among other things, our fixed charge coverage ratio for the most recently ended four full fiscal quarters would have been at least 2:00 to 1:00, as determined on a pro forma basis as if such indebtedness had been incurred or the disqualified stock or the preferred stock had been issued or such dividend or other restricted payment had been made at the beginning of such four-quarter period. Since EPL does not currently meet the fixed charge coverage ratio, EPL is not permitted to incur additional indebtedness (other than indebtedness under EPL’s revolving credit facility) and is prohibited from paying certain dividends ~~and~~ or restricted payments in an aggregate amount in excess of approximately $20.98 million under the terms of the 2012 Notes. A failure to meet the ratios affects only our ability to incur additional indebtedness and make certain dividend ~~and~~or other restricted payments, but does not constitute a default under these Notes.

2014 and 2013 Notes

On November 18, 2005, Intermediate issued 14 ½% senior discount notes due 2014 (the “2014 Notes”) and EPL issued 11 3/4% senior notes due 2013 (the “2013 Notes”). The Indentures governing the 2014 Notes and the 2013 Notes contain a number of covenants that, among other things, restrict, subject to certain exceptions, EPL’s, and, in the case of the 2014 Notes, Intermediate’s ability to incur additional indebtedness; pay dividends or certain restricted payments; make certain investments; sell assets; create liens; merge; and enter into certain transactions with their respective affiliates.

At ~~September~~ 29March 30, ~~2010~~2011, Intermediate had $29.3 million outstanding in aggregate principal amount of 2014 Notes along with $0.35 million of ~~the~~an accrued premium discussed below. No cash interest accrued on the 2014 Notes prior to November 15, 2009. Instead, the principal value of the 2014 Notes increased (representing accretion of original issue discount) from the date of original issuance until but not including November 15, 2009 at a rate of 14 ½ % per annum compounded annually, so that the accreted value of the 2014 Notes on November 15, 2009 was equal to the full principal amount of $29.3 million at maturity. Beginning on November 15, 2009, interest accrues on the 2014 Notes at an annual rate of 14 ½ % per annum payable semi-annually in arrears on May 15 and November 15 of each year, beginning May 15, 2010. Principal is due on November 15, 2014. The 2014 Notes are unsecured and are not guaranteed. The 2014 Notes may be redeemed at a premium, at the discretion of Intermediate. If Intermediate undergoes certain changes of control, each holder of the 2014 Notes may require Intermediate to repurchase all or a part of its notes at a price of 101% of the principal amount.

2925

If In ~~any of the 2014 Notes are outstanding at~~ May ~~15,~~ 2011, Intermediate is required to mandatorily redeem ~~for~~$10,144,000 ~~cash~~principal aamount ~~portion~~ of ~~each~~the outstanding ~~note~~2014 ~~then~~Notes ~~outstanding~~ at a redemption price of 104.5% of the accreted value of(as ~~such~~defined ~~portion~~in ofthe ~~such~~indenture ~~note,~~for ~~plus~~the ~~accrued~~2014 ~~and~~Notes), ~~unpaid~~along with the interest~~, if~~ ~~any.~~payment ~~Based~~that onwill ~~the~~then ~~principal~~be ~~amount~~due. This ofredemption ~~the~~payment ~~2014~~is ~~Notes~~currently ~~outstanding~~estimated atto ~~September 29,~~be ~~2010~~approximately $10.6 million , itplus isinterest. CAC ~~estimated~~and ~~that~~EPL weintend ~~will~~to beprovide the funds required to ~~pay~~Intermediate ~~approximately~~to enable Intermediate to make the redemption payment of $10.6 million inand ~~May~~interest ~~2011~~that tois ~~satisfy~~due ~~the~~on ~~mandatory~~May ~~redemption~~15, ~~requirement~~2011. As a holding company, the stock of EPL constitutes Intermediate’s only material asset. Consequently, EPL conducts all of the Company’s consolidated operations and owns substantially all of the consolidated operating assets. Intermediate has no material assets or operations; the Company’s principal source of the cash required to pay its obligations is the cash that EPL generates from its operations. EPL is a separate and distinct legal entity, has no obligation to make funds available to Intermediate, and the 2013 Notes and the 2012 Notes have restrictions that limit distributions or dividends that may be paid by EPL to Intermediate. See Note 1412 to our Condensed Consolidated Financial Statements for condensed consolidating financial statements of Intermediate and EPL.

As of ~~September~~ 29March 30, ~~2010~~2011, we had $106.56 million outstanding in aggregate principal amount of 2013 Notes. The 2013 Notes may be redeemed at a premium, at the discretion of EPL. If EPL undergoes certain changes of control, each holder of the 2013 Notes may require EPL to repurchase all or a part of its notes at a price of 101% of the principal amount.

As of ~~September~~ 29March 30, ~~2010~~2011, we calculated our “fixed charge coverage ratio” and our “consolidated leverage ratio” (as defined in the indenture governing the 2014 Notes) at 10:1193 to 1:00 and 68:7807 to 1:00, respectively. Similar ratios exist in the indenture governing the 2013 Notes. Under the indentures governing the 2014 ~~Notes~~ and 2013 Notes, we may incur indebtedness, Intermediate and EPL may issue disqualified stock, restricted subsidiaries of EPL may issue preferred stock, and the Company may make certain dividend and other restricted payments if, among other things, our fixed charge coverage ratio for the most recently ended four full fiscal quarters would have been at least 2:00 to 1:00, and if our consolidated leverage ratio would have been equal to or less than 7:50 to 1:00, all as determined on a pro forma basis as if such indebtedness had been incurred or the disqualified stock or the preferred stock had been issued or such dividend or other restricted payment had been made at the beginning of such four-quarter period. Since we do not currently meet the fixed charge coverage ratio and the consolidated leverage ratio, EPL is not permitted to incur additional indebtedness (other than indebtedness under EPL’s revolving credit facility) under the terms of the 2013 and 2014 Notes, Intermediate is not permitted to incur additional indebtedness under the terms of the 2014 Notes, EPL is prohibited from paying certain dividends and restricted payments under the 2013 Notes in an aggregate amount in excess of approximately $20.98 million and Intermediate is prohibited from paying certain dividends and restricted payments to its parent, El Pollo Loco Holdings, Inc., under the 2014 Notes in an aggregate amount in excess of approximately $20.98 million. .A failure to meet the ratios affects only our ability to incur additional indebtedness and make certain dividend and other restricted payments, but does not constitute a default under the ~~these~~ indentures governing the Notes.

Other Obligations

At ~~September~~ 29March 30, ~~2010~~2011, we had outstanding letters of credit totaling $6.4 million, which served ~~primarily~~ as collateral primarily for our various workers’ compensation insurance programs.

We have certain land and building leases for which the building portion is treated as a capital lease. These assets are amortized over the shorter of the lease term or useful life.

Franchisees pay a monthly advertising fee of 4% of ~~gross~~net sales for the Los Angeles~~, California~~ designated market area and 4% to 5% of ~~gross~~net sales for other markets. Pursuant to our Franchise Disclosure Document, we contribute, where we have company-operated restaurants, to the advertising fund on the same basis as franchised restaurants. Under our franchise agreements, we are obligated to use all advertising fees collected from franchisees to purchase, develop and engage in advertising, public relations and marketing activities to promote the El Pollo Loco ® brand.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to recoverability of fixed assets, intangible assets, account receivables, closed restaurants, workers’ compensation insurance, the cost of our self-insured health benefits, the realization of gross deferred tax assets, tax reserves, and contingent liabilities including the outcome of litigation. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A summary of our critical accounting policies and estimates is included in our Annual Report on Form 10-K (File No. 333-115644) as filed with the Securities and Exchange Commission on March 3025, ~~2010~~2011.

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Litigation Contingency

As discussed in Note 8 to our Condensed Consolidated Financial Statements in Part I of this Report, we are subject to employee claims against us based, among other things, on discrimination, harassment, wrongful termination, or violation of wage and labor laws in the ordinary course of business. These claims may divert our financial and management resources that would otherwise be used to benefit our operations. In recent years a number of restaurant companies have been subject to wage and hour class action lawsuits alleging violations of federal and state labor laws. A number of these lawsuits have resulted in the payment of substantial damages by the defendants. We are currently a defendant in several wage and hour class action lawsuits. Since our insurance carriers have historically denied coverage of these types of claims, a significant judgment against us could adversely affect our financial condition and adverse publicity resulting from these allegations could adversely affect our business. In an effort to mitigate these adverse consequences, we have in the past, and could in the future, ~~seek to~~ settle certain of these lawsuits. The on-going expense of these lawsuits, and any substantial settlement payment or judgment against us, could adversely affect our business, financial condition, operating results or cash flows. In ~~2009~~As of March 30, 2011, we ~~accrued~~currently ~~$10.4~~have ~~million~~recorded ~~for~~within ~~litigation~~our ~~settlements~~financial ofstatements ~~which~~an aggregate reserve of $21.7 9 million ~~remains~~for tocases bewhich ~~paid~~we ~~and~~have isagreed ~~included~~to insettle ~~the~~and ~~accompanying~~is ~~condensed consolidated~~expected ~~balance~~to ~~sheets~~be inpaid ~~accounts~~no ~~payable~~later asthan ofMay ~~September 29~~20, ~~2010~~ 2011.

Off-Balance Sheet and Other Arrangements

As of ~~September~~ 29March 30, ~~2010~~2011 and ~~September~~March 3031, ~~2009~~2010, we had letters of credit outstanding under our Credit Facility in the aggregate amount of approximately $6.4 million and $6.3 million, respectively.

As a result of assigning our interest in obligations under real estate leases in connection with the sale of company-owned restaurants to some of our franchisees, we are contingently liable on six lease agreements. These leases have various terms, the latest of which expires in 2015. As of ~~September~~March 2930, ~~2010~~ 2011, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $1.1 0 million. The present value of these potential payments discounted at our estimated pre-tax cost of debt at ~~September~~March 2930, ~~2010~~2011 was approximately $0.8 7 million. Our franchisees are primarily liable on the leases. We have cross-default provisions with these franchisees that would put them in default of their franchise agreement in the event of non-payment under the leases. We believe these cross-default provisions reduce our risk that we will be required to make payments under these leases. Accordingly, no liability has been recorded on the Company’s books related to this guarantee.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The inherent risk in market risk sensitive instruments and positions primarily relates to potential losses arising from adverse changes in interest rates. We are subject to market risk from exposure to changes in interest rates based on our financing activities. This exposure relates to borrowings under EPL’s ~~senior secured~~Credit ~~credit~~Facility ~~facility~~ that bears interest at floating rates. As of ~~September 29~~March 30, ~~2010~~2011, we had no amounts outstanding under this facility.

We purchase food and other commodities for use in our operations based on market prices established with our suppliers. Many of the commodities purchased by us can be subject to volatility due to market supply and demand factors outside of our control. To manage this risk in part, we attempt to enter into fixed price or floor/ceiling purchase commitments, with terms typically of one to two years, for our chicken requirements. Substantially all of our food and supplies are available from several sources, which help to diversify our overall commodity cost risk. In addition, we may have the ability to increase certain menu prices, or vary certain menu items offered, in response to food commodity price increases. We do not use financial instruments to hedge commodity prices, since our purchase arrangements with suppliers, to the extent that we can enter into such arrangements, help control the ultimate cost that we pay.

Item 4. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have concluded that the design and operation of our disclosure controls and procedures are effective as of ~~September~~ 29March 30, ~~2010~~2011. This conclusion is based on an evaluation conducted under the supervision and with the participation of Company management. Disclosure controls and procedures are those controls and procedures which are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), by the issuer is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in its Exchange Act reports is accumulated and communicated to the issuer’s management, including its principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting that occurred during our 3913 weeks ended ~~September~~March 2930, ~~2010~~2011 that materially affect, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

~~As previously~~On ~~disclosed~~May in30, ~~earlier~~2008, ~~reports~~Jeannette Delgado, a former Assistant Manager filed ~~with~~a ~~the~~purported ~~Securities~~class ~~and~~action ~~Exchange Commission,~~on ~~the~~behalf ~~Company~~of ~~entered~~all ~~into~~hourly an(i.e. ~~agreement~~non-exempt) employees of EPL in ~~the~~state ~~fourth~~court ~~quarter~~in Los Angeles County alleging violations of ~~2009~~ certain California labor laws and the California Business and Professions Code including failure to ~~settle~~pay ~~for~~overtime, $8failure to provide meal periods and rest periods and unfair business practices.0 ~~million~~By astatute, the purported class ~~action~~extends ~~lawsuit~~back ~~brought~~four byyears, ~~former managers~~to ~~Haroldo~~May ~~Elias~~30, ~~Marco~~2004. ~~Ramirez~~Plaintiff’s requested remedies include compensatory and ~~Javier~~punitive ~~Rivera~~damages, injunctive relief, disgorgement of profits and reasonable attorneys’ fees and costs. The ~~Company~~parties ~~funded~~agreed ~~the settlement~~to onsettle ~~January~~this ~~14,~~matter ~~2010~~for approximately $1.9 million and ~~the~~executed ~~Superior~~a ~~Court~~settlement ofagreement. ~~the~~This ~~State~~amount ~~of California,~~was ~~County~~accrued offor ~~Los~~in ~~Angeles,~~the ~~granted~~prior ~~final~~year ~~approval~~and ofis included in the ~~class~~accompanying ~~wide settlement~~condensed ~~and~~consolidated ~~entered~~balance ~~Final~~sheets ~~Judgment~~in ataccounts apayable ~~hearing~~as onof ~~April~~March 2030, ~~2010~~2011. The ~~This settlement~~Court ~~also~~issued ~~included~~an ~~and~~order ~~settled~~granting ~~the~~final ~~previously~~approval ~~disclosed~~of ~~purported~~the ~~class action~~settlement ~~complaint~~on ~~filed~~February by16, ~~Salvador~~2011, ~~Amezcua.~~and ~~Total~~the ~~payments~~settlement ~~related~~is expected to ~~this~~be ~~case were~~funded ~~$8.7~~no ~~million~~later than May 20, 2011.

In April 2007, Dora Santana filed a purported class action in state court in Los Angeles County on behalf of all “Assistant Shift Managers.” Plaintiff alleges wage and hour violations including working off the clock, failure to pay overtime, and meal break violations on behalf of the purported class, currently defined as all Assistant Managers from April 2003 to present. The parties have agreed to settle this matter for approximately $0.8 million and have executed a Settlement Agreement. This amount was accrued in the prior year and is included in the accompanying condensed consolidated balance sheets in accounts payable as of September 29, 2010. The Court granted final approval of this settlement in August 2010 and the settlement was funded on October 25, 2010.

On May 30, 2008, Jeannette Delgado, a former Assistant Manager filed a purported class action on behalf of all hourly (i.e. non-exempt) employees of EPL in state court in Los Angeles County alleging violations of certain California labor laws and the California Business and Professions Code including failure to pay overtime, failure to provide meal periods and rest periods and unfair business practices. By statute, the purported class extends back four years, to May 30, 2004. Plaintiff’s requested remedies include compensatory and punitive damages, injunctive relief, disgorgement of profits and reasonable attorneys’ fees and costs. The parties have agreed to settle this matter for approximately $1.9 million and have executed a Settlement Agreement. This amount was fully accrued for in the prior year and is included in the accompanying condensed consolidated balance sheets in accounts payable as of September 29, 2010. On October 28, 2010, the Judge ruled that the settlement was fair and granted final approval upon successful notice to additional class members and a determination of the fees due to the settlement administrator. A final approval hearing is set for January 7, 2011.

Also see our Annual Report on Form 10-K for the year ended December 3029, ~~2009~~2010 as filed with the SEC on March 3025, ~~2010~~2011.

Item 1A. Risk Factors

The Company’s business, financial condition and operations are subject to a number of factors, risks and uncertainties, including those previously disclosed under Part I. Item 1A “Risk Factors” of the Company’s annual report on Form 10-K for the fiscal year ended December 3029, ~~2009~~2010 as well as any amendments thereto or additions and changes thereto contained any inof ~~this~~our subsequent filings of quarterly ~~report~~reports on Form 10-Q ~~and~~, ~~any~~current ~~subsequent filings of quarterly~~ reports on Form 108-QK or other filings with the SEC. The disclosures in the Company’s annual report on Form 10-K, this quarterly report on Form 10-Q and the Company’s subsequent reports and filings are not necessarily a definitive list of all factors that may affect the Company’s business, financial condition and future results of operations. There have been no material changes to the risk factors as disclosed in the Company’s annual report on Form 10-K for the fiscal year ended December 3029, ~~2009, except as provided in any amendments thereto and those set forth below~~2010.

The delay or inability to hire new executives may have an adverse impact on our business and results of operations.

As previously announced by the Company, effective September 12, 2010 Stephen Carley, the former President, Chief Executive Officer and director of the Company, voluntarily resigned from all his positions with the Company and its affiliates. In connection with such resignation, Stephen J. Sather was appointed to serve as the acting President and Chief Executive Officer of the Company. Also as previously disclosed by the Company, effective October 15, 2010 Karen Eadon voluntarily resigned from her position as Senior Vice President, Marketing for the Company. The Company is actively engaged in executive searches for a new Chief Executive Officer as well as a new senior marketing officer. The Company depends on the unique abilities and knowledge of its executive officers and other key personnel. Though the Company is actively engaged in executive searches to fill the positions of Chief Executive Officer and senior marketing officer, there can be no assurance that the Company will be able to identify and hire qualified individuals for such positions in a timely manner. An extended period of time without a permanent Chief Executive Officer or senior marketing officer could add uncertainty to the Company and materially and adversely affect the Company’s business, financial condition or results of operations. Furthermore, in recruiting new executive officers, the Company will incur expenses related to recruiting and hiring, and possibly experience transitional inefficiencies. In the event the Company is unable to effect a smooth transition from its acting to a new Chief Executive Officer, the resulting disruption could negatively impact the Company’s operations and impede the Company’s ability to manage its business successfully and competitively.

Item 5. Other Information

On ~~November~~ 12May 10, ~~2010~~2011, the Company issued a press release reporting its results of operations for the ~~third~~13 ~~quarter and 39~~ weeks ended ~~September~~March 2930, ~~2010~~2011. A copy of the press release is being furnished as Exhibit 99.1 hereto and is incorporated herein by this reference. We do not intend for this exhibit to be incorporated by reference into any other filings we make with the SEC. This information is provided in this Report in response to Item 2.02, Results of Operations and Financial Condition, and Item 9.01, Financial Statements and Exhibits, of Form 8-K in lieu of filing a Form 8-K.

On October 21, 2010, the Company’s Credit Facility was assigned from Jefferies Finance LLC to GE Capital Financial, Inc. In connection with this assignment the parties entered into an Agency and Assignment Agreement and Amendment No. 1 to the Credit Agreement and the Other Loan Documents, which is attached hereto as Exhibit 10.2 and incorporated herein by reference. The terms and conditions of the Credit Facility remain essentially the same as described in Note 11 to the Company’s Condensed Consolidated Financial Statements.28

Item 6. Exhibits

Exhibit
Number	~~Description of Documents~~Footnote	Description of Documents
10.1	Second Amendment to Distribution Agreement dated as of July 30, 2010 by and among El Pollo Loco, Inc. and Meadowbrook Meat Company, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8 K filed on August 10, 2010)*	Letter Agreement dated March 19, 2011 by and between El Pollo Loco, Inc. and Pilgrim’s Pride Corporation
10.2	Agency and Assignment Agreement and Amendment No. 1 to the Credit Agreement and the Other Loan Documents dated October 21, 2010 by and among GE Capital Financial Inc., Jefferies Finance LLC, EPL Intermediate, Inc. and El Pollo Loco, Inc.†	Amended and Restated Employment Agreement dated as of January 18, 2011 by and between El Pollo Loco, Inc. and Stephen J. Sather (Incorporated by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K, filed on January 19, 2011)
31.1	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
10.3	†	Employment Agreement dated as of January 18, 2011 by and between El Pollo Loco, Inc. and Samuel Borgese (Incorporated by reference to Exhibit 10.2 to the company’s Current Report on Form 8-K, filed on January 19, 2011)
31.2	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
31.1		Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
32.1	Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
31.2		Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
32.2	Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
32.1		Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
99.1	Press Release dated November 12, 2010
32.2		Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
99.1		Press Release dated May 10, 2011

34Footnotes:

Certain confidential portions of this exhibit have been redacted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request.

†

Management contracts or compensatory plans and arrangements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EPL INTERMEDIATE, INC.
Date: November 12, 2010	By:	/s/ Stephen J. Sather
Date: May 11, 2011	By:	/s/ Stephen J. Sather
		Stephen J. Sather
		Acting President and Chief Executive Officer
		President and Chief Executive Officer
	By:	/s/ Gary Campanaro
		Gary Campanaro
		Chief Financial Officer and Treasurer

3530

EXHIBIT INDEX

Exhibit
Number	~~Description of Documents~~Footnote	Description of Documents
10.1	Second Amendment to Distribution Agreement dated as of July 30, 2010 by and among El Pollo Loco, Inc. and Meadowbrook Meat Company, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8 K filed on August 10, 2010)*	Letter Agreement dated March 19, 2011 by and between El Pollo Loco, Inc. and Pilgrim’s Pride Corporation
10.2	Agency and Assignment Agreement and Amendment No. 1 to the Credit Agreement and the Other Loan Documents dated October 21, 2010 by and among GE Capital Financial Inc., Jefferies Finance LLC, EPL Intermediate, Inc. and El Pollo Loco, Inc.†	Amended and Restated Employment Agreement dated as of January 18, 2011 by and between El Pollo Loco, Inc. and Stephen J. Sather (Incorporated by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K, filed on January 19, 2011)
31.1	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
10.3	†	Employment Agreement dated as of January 18, 2011 by and between El Pollo Loco, Inc. and Samuel Borgese (Incorporated by reference to Exhibit 10.2 to the company’s Current Report on Form 8-K, filed on January 19, 2011)
31.2	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
31.1		Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
32.1	Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
31.2		Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
32.2	Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
32.1		Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
99.1	Press Release dated November 12, 2010
32.2		Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
99.1		Press Release dated May 10, 2011

36Footnotes:

Certain confidential portions of this exhibit have been redacted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request.

†

Management contracts or compensatory plans and arrangements.

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