El Pollo Loco Holdings, Inc. Segments Disclosure
17. SEGMENT REPORTING
Operating segments are defined as components of a company that engage in business activities from which it may earn revenue and incur expenses, and for which separate financial information is available and is regularly reviewed by the chief operating decision maker ("CODM") to assess the performance of the individual segments and make decisions about company resources such as personnel and working capital to be allocated to the segments.
The Company derives revenue from three primary sources: (1) company-operated restaurant revenue, (2) franchise revenue, which is comprised primarily of franchise royalties and, to a lesser extent, franchise fees and sublease rental income, and (3) franchise advertising fee revenue. All significant revenues relate to retail sales of food and beverages through either company-operated or franchised restaurants.
The Company determined that it has one operating segment and one reportable segment which is reflected in the Company’s current organizational and management structure. The accounting policies of the segment are the same as those described in Note 2 “Summary of Significant Accounting Policies.”
The Company’s CODM is the Chief Executive Officer who manages the Company’s operations on a reportable segment basis. The Company’s CODM reviews its operations and financial performance at a consolidated level by comparing actual results to budgeted figures and prior year results. This approach allows the CODM to assess whether the Company’s operating segment is meeting its financial goals, identify trends and make more informed decisions about resource allocation and performance targets.
When evaluating the Company’s financial performance, the CODM regularly reviews total revenues, segment expenses and consolidated net income as reported on the Consolidated Statements of Operations as well as non-GAAP measures such as restaurant contribution margin and Adjusted EBITDA to allocate Company resources and assess the performance of the Company. Segment asset information is not used by the CODM to assess performance and allocate resources.
The table below is a summary of the segment net income, including significant segment expenses for the years ended December 31, 2025, December 25, 2024 and December 27, 2023 (in thousands):
December 31, 2025 | December 25, 2024 | December 27, 2023 | ||||||
Total revenue | $ | 490,046 | $ | 473,008 | $ | 468,664 | ||
Less: | ||||||||
Food and paper costs | 100,083 | 100,725 | 108,250 | |||||
Labor and related expenses | 127,258 | 127,179 | 127,244 | |||||
General and administrative expenses | 50,258 | 46,270 | 42,025 | |||||
Franchise expenses | 47,762 | 42,307 | 38,404 | |||||
Occupancy expenses | 32,551 | 30,792 | 31,318 | |||||
Other operating expenses(1) | 73,835 | 68,488 | 69,753 | |||||
Depreciation and amortization | 15,966 | 15,717 | 15,235 | |||||
Other segment expenses(2) | 288 | 362 | (3,357) | |||||
Total operating expenses | 448,001 | 431,840 | 428,872 | |||||
Income from operations | 42,045 | 41,168 | 39,792 | |||||
Interest expenses, net | 4,470 | 5,899 | 4,811 | |||||
Provision for income taxes | 11,089 | 9,605 | 9,324 | |||||
Income tax receivable agreement (income) expenses | - | (20) | 103 | |||||
Total segment net income | $ | 26,486 | $ | 25,684 | $ | 25,554 |
| (1) | Other operating expenses are comprised of utilities, repairs and maintenance, advertising, credit card processing fees, delivery service provider fees, restaurant supplies and other restaurant operating costs. |
| (2) | Other segment expenses include loss (gain) on disposal of assets, gain on recovery of insurance proceeds, property, equipment and expenses, (gain) loss on disposition of restaurants and impairment and closed-store reserves. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.