Good day, ladies and gentlemen. Thank you for standing by. Welcome to the El Pollo Loco Fourth Quarter 2021 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this conference is being recorded today, March 10, 2022. Now, I'd like to turn the conference over to Larry Roberts, Chief Executive Officer and Interim Chief Financial Officer. Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter 2021 earnings release. If not, it can be found at www.elpolloloco.com in the investor relations section. Before we begin our formal remarks, I need to remind everyone that our discussion today will include forward-looking statements, including statements related to the impact of the COVID-19 pandemic on our business and strategic actions we are taking in response, as well as our marketing initiatives, cash flow expectations, capital expenditure plans, and plans for new store openings, among others. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we currently expect. We refer you to our recent SEC filings, including our Form 10-K, for more detailed discussion of the risks that could impact our future operating results and financial condition. We expect to file our 10-K for 2021 tomorrow, and we encourage you to review that document at your earliest convenience. During today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and reconciliations to comparable GAAP measures are available in our earnings release. Now, before we get started, I'd like to take a brief moment to comment on my appointment as permanent Chief Executive Officer of El Pollo Loco that was announced this afternoon. It is an incredible honor to lead this company along with the employees and franchisees that made this such a great brand. While the current environment has its challenges, I believe the positioning of the brand is very strong, and I'm extremely excited about the initiatives we are implementing to strengthen the business further, as well as capture the company's long-term growth potential. With that, I'd like to touch on our recent results and spend some time discussing initiatives that we believe will set us up for successful 2022 and beyond. As we previously announced in our January business update, we are pleased with our sales and operating performance during the fourth quarter as we posted 11% growth in system-wide comparable restaurant sales. Staffing challenges and a resurgence of COVID-19 had an inordinate impact on our company-owned restaurant comparable sales during the quarter to the tune of approximately 5-6 percentage points. Despite this sales impact, plus accelerating commodity and wage inflation during the quarter, our teams did a fantastic job managing our business, resulting in a solid restaurant contribution margin of 15.7% and earnings per share of $0.17. Touching briefly on the first quarter of 2022 to date, some of the actions taken to manage the Omicron virus also impacted our business in January and the early part of February. These actions included reducing operating hours and service channels, along with temporarily closing a small number of restaurants. Despite the impact of the Omicron virus through February 23, year-to-date system comparable restaurant sales were 7.4%, consisting of a 1.5% increase in company-operated restaurants and an 11.2% increase in franchise restaurants. I am pleased to say that the impact of Omicron is dissipating and has become negligible over recent weeks. In addition, we are seeing an increase in applicant flow, which has enabled us to significantly reduce staffing shortages across our company-operated restaurants. Commodity and wage inflation is now our biggest challenge, which I will discuss later. Also, with regard to 2022, we are modifying our acceleration agenda to focus on four pillars that will further strengthen our business in the years to come. Let me start with our culture, which includes three key elements. First, create a restaurant operations mindset across the entire organization, not just in our restaurants. Second, act as one system by further engaging franchisees and making sure everything we do encompasses the full scope of our system-wide operations. Third, create an exceptional work environment for our restaurant employees based on recognition and support while also maintaining accountability. I will talk more about the first two elements on future calls as we develop concrete action plans. I'd like to take a moment to discuss what we are doing to create an exceptional work environment for our restaurant employees, which is critical to delivering a great experience for our customers. During the fourth quarter, we focused on engagement with our team members through recognition and emphasis on getting to know you conversations. Area leaders were tasked with talking with each team member during their restaurant visits to build their relationship and understand their career interests. Recognition boards and snack tables are now prominently displayed in every restaurant. In November, we launched Employee Appreciation Month, which included an employee engagement survey to better understand what's on the minds of our team members. This is the first survey of its kind in 10 years within our restaurants, and we believe it is already creating a positive impact while highlighting employee concerns that we will address during the years. More importantly, it's fulfilling our goal to create a familiar culture in our restaurants. While early, we have experienced a significant reduction in turnover during the fourth quarter versus the second and third quarters of 2021, and we believe we can still do better. As we move through 2022, we have many other initiatives planned at both the restaurant level and support center to further strengthen the employee local culture. Our second pillar is brand differentiation and awareness. Over the past year, we believe our messaging has become inconsistent, but let's focus on what clearly differentiates us from other restaurant concepts, which is the quality of our food and healthier offerings provided by our freshly grilled chicken. It's food that combines our Mexican roots with the culinary culture of Los Angeles, or as we say, it's L.A. Mex. We need to own this differentiation and build more awareness around our unique offerings, which we refer to as owning our lane. As part of this strategy, we are striving to extend our reach with younger consumers while maintaining our strong core customer base. A big part of these efforts is enhancing our product innovation process. We've recently added additional resources along our product development team to improve everything from concept screening and development to testing and successfully launching new products. We are already making significant strides in the product development process and believe that we will increase the success rate of our new product launches, especially as we reach out to younger consumers. We also continue to expand our efforts in digital and social media. Currently, our digital sales comprise 11%-12% of our sales, which is an increase from 10% at the end of 2020. While we're making good progress, we believe that we have only just begun to tap into the full potential of digital and social media. To that end, we've expanded our digital team and are implementing a comprehensive go-to market strategy that will integrate TV, social, and digital media channels to deliver coordinated, targeted messages to various user groups. In addition, we are in the final stages of entering into a partnership with a customer intelligence provider that will greatly enhance our ability to segment consumer information, both from our loyalty program and across our business. That brings us to our third pillar, customer service, the goal of which is to deliver exceptional service profitably. This correlates directly with our ability to properly staff our restaurants and train our team members. As I highlighted earlier, we have made very good progress staffing our restaurants during these challenging times. However, we need to maintain our intensity and focus to ensure that we achieve and maintain 100% staffing across all of our restaurants. Therefore, staffing and retaining team members remains our number one priority. To that end, we continue to increase our recruiting efforts to find and retain the best people for our restaurant. This includes ensuring that the wages and benefits we offer are competitive, adding resources to surface more candidates faster, and creating a culture where excellence is rewarded and celebrated. Along with our staffing efforts, we're developing the leadership capabilities and business acumen of our area leaders and general managers. This includes monthly development days for our area leaders in which they come to our support center for leadership training. By developing better leaders, we believe that we will significantly reduce turnover and improve our restaurant operations. Our other big initiative to improve customer service is our work to simplify operations for our teams and franchisees, which should ultimately enhance the customer experience. These efforts can be broken down into three categories, the menu, operations processes, and equipment. With regards to the menu, we continue the process of eliminating low-mix menu items and removing unnecessary ingredients. In conjunction, we are working on a new simplified menu board, which we will test later this year. The goal of the project is to make the menu board easier for customers to comprehend and for team members to execute. The result should be faster service with better or-order accuracy. Lastly, we are introducing a more robust front-end assessment of new product and deal offers to ensure they are not overly complex operationally. In addition to menu simplification, we're looking closely at process simplification, including an active evaluation of the most labor-intensive activities in our restaurants to find ways to improve our kitchen efficiency without impacting product quality. An example of this is a change to buy stemless serrano peppers and pre-cut cilantro, which will remove preparation activities from our restaurants starting in mid-March. Finally, we are upgrading our equipment with the goal to simplify our back-of-house processes and enhance our food quality. For example, we are currently testing new equipment to make our house salsa. Early results are very positive with a significant win-win. Not only does it eliminate one-three hours of work in the restaurants, the salsa is dramatically better and more consistent. As you can see, we have a lot to be excited about from these efforts, and we believe they will allow us to deliver improved service to our customers in 2022 and beyond. Our last pillar is accelerating development. Our system restaurant volumes now average over $2 million, which we believe are very enticing to restaurateurs looking to expand. While we've had some success in 2021, our franchising activities fell short of our goals. Clearly, our message is not getting out there as effectively as we would like, and in response, we are ramping up efforts to better capture qualified franchisees in this highly competitive environment. To start, we have strengthened our franchise team by adding a senior vice president of franchising during the fourth quarter, and we are in the process of hiring a director of franchise sales who will be 100% focused on recruiting new franchisees into the El Pollo Loco system. With resources in place, our focus is on modifying and enhancing our franchise recruiting efforts, including the development of a new website and completely new marketing materials that include the use of both print and video. In addition, we will be broadening our franchise recruiting efforts to include larger multi-concept franchisees as well as mid-scale operators. Lastly, we are fine-tuning our recruiting process by involving senior management early in the process, including attendance at various conventions. We expect these improvements will be completed by the end of the first quarter and are confident that we will make strides in our franchise efforts during the current year. In summary, despite the challenges we have faced over the past two years, I truly believe that El Pollo Loco brand is stronger than ever. The entire organization is fully engaged on the four pillars of our strategic priorities that will further strengthen our position as a very distinctive concept that resonates across a broad range of consumers. I'm very excited by the work we are doing and the opportunities ahead of us. Most importantly, I'd like to thank all of our restaurant and support center teams, as well as our franchisees for their hard work and commitment to better the El Pollo Loco brand. With that, let me briefly review our fourth quarter financial results in greater detail. For the fourth quarter ended December 29, 2021, total revenue decreased 1.3% to $109 million compared to $110.3 million in the fourth quarter of 2020. Company-operated restaurant revenue decreased 2.9% to $93.6 million from $96.4 million in the same period last year. The decrease in company-operated restaurant sales was primarily due to $4.6 million attributed to the extra operating week in fiscal 2020 and a $2.5 million decrease due to the sale of eight company-owned restaurants to a franchisee during 2021. These were partially offset by a 6.2% increase in company-operated comparable restaurant sales and $2.3 million in non-comparable restaurant sales, which included restaurants temporarily closed due to the pandemic during last year's fourth quarter. The increase in company-operated comparable restaurant sales was comprised of a 5.6% increase in average check and a 0.6% improvement in transactions. During the quarter, our gross pricing increase versus 2020 was 6.8%. As I mentioned earlier, Omicron has negatively impacted our performance at the beginning of our first quarter. Through February 23, first quarter system-wide comparable restaurant sales increased 7.4%, consisting of a 1.5% increase at company-owned restaurants and 11.2% increase at franchise restaurants, while two-year system-wide comparable sales were up 3.5%. Franchise revenue was $8.8 million during the fourth quarter compared to $7.9 million in the prior year period. This increase was driven by a franchise comparable restaurant sales increase of 14.2%, as well as the opening of three new franchise restaurants during or subsequent to the fourth quarter of 2020 and revenue generated from eight company-owned restaurants sold to an existing franchisee during 2021. This was partially offset by the closure of two franchise restaurants during the same period. Turning to expenses, food and paper costs as a percentage of company restaurant sales increased 80 basis points year-over-year to 27.2% due to increased commodity costs and investments in new packaging. These were partially offset by higher menu prices. As highlighted earlier, commodity inflation accelerated during Q4 2021 and continues to increase early in 2022. For the first quarter, we expect commodity inflation of approximately 18%. We believe that commodity inflation will decline later in the year as prices for boneless chicken, avocado, and other products fall from their current highs. Labor and related expenses as a percentage of company restaurant sales decreased 10 basis points year-over-year to 32.3% as higher menu prices and the benefit of lapping 2020 COVID-related costs offset higher wage inflation, overtime costs, and other labor-related costs. Based on the continued labor pressure that we're experiencing, we're expecting wage inflation of approximately 6% during the first quarter of 2022. Through February 23, we have incurred approximately $2.2 million of COVID-related expenses, including leave of absence and overtime pay. Occupancy and other operating expenses as a percentage of company restaurant sales decreased 60 basis points to 24.9% due to sales leverage, favorability in cleaning supplies, and the collection of an insurance claim. Our restaurant contribution margin for the quarter was 15.7%. General and administrative expenses increased to $9.5 million from $8.9 million in the year ago period due to an increase in management bonus expense and legal costs, partially offset by $600,000 decrease in stock compensation expense. As a percent of total revenues, G&A increased approximately 60 basis points to 8.7%. We recorded a provision for income taxes of $1.7 million in the fourth quarter of 2021, for an effective tax rate of 21.5%. This compares to a provision for income taxes of $2 million and an effective tax rate of 26.3% in the prior year fourth quarter. We reported GAAP net income of $6.2 million, or $0.17 per diluted share in the fourth quarter compared to GAAP net income of $5.5 million or $0.15 per diluted share in the prior year period. Pro forma net income for the quarter was $6.1 million or $0.17 per diluted share compared to pro forma net income of $5.7 million or $0.16 per diluted share in the fourth quarter of last year. For a reconciliation of pro forma net income and earnings per share to the comparable GAAP figures, please refer to our earnings release. Regarding development, during the fourth quarter, one franchise restaurant was opened in Watauga, Texas, while no new company restaurants were opened. Turning to liquidity, as of December 29th, 2021, we had $40 million of debt outstanding and $30 million in cash and cash equivalents. Lastly, due to the uncertainty surrounding the COVID-19 pandemic, the company is not providing a financial outlook for the year ending December 28th, 2022. However, we are providing the following limited guidance for fiscal 2022. The opening of three-six company-owned restaurants and six-10 franchise restaurants, remodeling of 10-20 company-operated restaurants and 20-30 franchise restaurants, capital spending of $20 million-$25 million, and a pro forma income tax rate of 26.5%. This concludes our prepared remarks. I'd like to thank you again for joining us on the call today, and I'm now happy to answer any questions that you may have. Thank you. At this time, we'll now be conducting a question and answer session. If you'd like to ask a question, please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question will be coming from the line of Jake Bartlett with Truist. Please proceed with your questions. Hey, Larry. Thanks for taking the questions and, congratulations on being appointed CEO. Well, it's well deserved. Thank you, Jake. I guess my first question is on current same-store sales trends. I appreciate you giving the year-to-date trends. But I guess could you split out the company and franchise two-year trends year to date? Would you be willing to give any more color, maybe breaking out January and February, just so we know if there was some sort of inflection as Omicron receded? Yeah. Just the you know two-year trends have been pretty consistent across company and franchise. I think the company is somewhere around flattish while the franchisees continue to be strong. I think off the top of my head they're in low double digits on a two-year basis. Okay. Good. Yeah. Let me. We can follow up after the call as well. Yeah. What was the second part of your question? Oh, yeah. I was wondering if you would be willing to break out January versus February. I guess maybe if we get a more real-time trend. Well, yeah. In January we were harder hit than February. I mean, January is really the peak of COVID, and you saw that both in our sales and franchisee sales, and then they started bouncing back. You know, late January, early February is when we saw the inflection point and we started seeing improvements in sales. Okay. Great. That's helpful. Then I guess any more detail on the staffing environment currently? I think you said 5%-6% same-store sales impact in Q4. Is it still that level of impact right now? I guess maybe what is the staffing level versus 2019 or where you'd like to be? I mean, our staffing levels have improved significantly over the past month or so. I mean, really it started back in December. We started seeing progress. COVID kinda knocked us back a little bit and flattened out, and now they've improved to the point where, you know, we really have a very few, if any, restaurants. Certainly during the week, we have really no restaurants that aren't fully open in all channels. A few still have slightly reduced operating hours, but it's just a handful. Overall, the impact due to staffing levels is down to negligible. You know, basically just about zero. The only thing we do see is on weekends, we see some call-outs and things, but overall, you know, we're now able to keep all of our restaurants open all channels in basically all hours of operation. That's great. That's really helpful. And then I guess, for inflation, you know, up to 18% in the first quarter is a sizable jump. Have you taken any more price or do you plan on taking any more price to combat that or offset that? And are you maintaining? I think you previously said your full-year expectation for high single-digit to low double-digit commodity inflation. Are you maintaining that for the full year and expect it to come down in the second half? Well, we are expecting to come down in the second half. I guess I'm holding off in terms of giving a full year outlook, just given the volatility that we're seeing across all markets. I mean, just a little color on the 18% number. I mean, part of that is driven by the fact that we had such great contracts last year. I mean, I think last year our commodity inflation during Q1 was zero. So there is a big step up we incurred, call it in the fall, you know, late in the year when we renegotiated our contracts. So that's part of the driver. Then the other big drivers on the acceleration in inflation were around, you know, really three products. One was boneless chicken, so our boneless breasts in particular, which we had made a decision to let float at year-end when we negotiated contract, and those prices have gone up. Fortunately, we did lock in bone-in chicken because that's also been impacted, you know, in terms of the markets, but we're locked in at that rate, so that has not resulted in additional inflation on top of what we were expecting. The second product was avocados. You know, I mean, that will be temporary. That was really due to the issues in Mexico, which stopped exports from Mexico to the U.S. on avocados for a couple weeks. That should get back in line here. The third item was really pinto beans, and that was driven by weather. Here in California with the rains, our supplier had to shut down production of pinto beans for a while, and we had to source it from another supplier. That drove the pinto bean costs during the quarter. We had, you know, a couple, I'll call it market factors and I'd say a couple, you know, non-market factors driving that 18% rate. Having said that, like I said, I expect inflation to remain at high levels, but we do see it coming down over the back half of the year. Thanks. Appreciate all that color. In terms of pricing, yeah, your other part of the question was pricing. Yes. Yeah. I mean, you know, we ran in the first quarter 8.2% price. We're getting ready to take an additional 3% of price here in the next week or so. We will be constantly looking at that. Whereas in the past, you know, we've tended to take pricing one-two times a year, I think this is gonna be an environment in which we are constantly looking at price and looking at, you know, it could be every month taking price just to keep up with inflation. You know, we want to make sure that we're monitoring inflation, seeing where it's heading before making these pricing decisions rather than try to get out in front of it and take a huge price increase that may impact our consumer. Yeah, I'd also highlight on top of the pricing, I mean, the entire organization is looking at ways to, you know, how else do we improve margins in the business? That's everything from re-looking at, you know, the makeup of products that we have, re-looking on the menu and, you know, what we provide in our combo meals and things. You know, looking at the types of ingredients that we use. So there's a lot of work going on to see, you know, how we might improve our margins across the board. At the same time, what we want to be really, really careful about is don't do anything to jeopardize the quality of the food. I don't want to be in a position in which, you know, because we're trying to protect margins in the short term, we jeopardize the consumer experience and the quality of our food. Everything we do is very focused on maintaining that food quality. Some of these things, the bigger things we have in the pipeline that we're looking at from a margin standpoint, will have to be tested and reviewed again to make sure that we don't upset the consumer and really impact our food quality. That's great. I appreciate all that color. Congratulations again. Thank you. Our next question is coming from the line of David Tarantino with Baird. Please proceed with your question. Hi, good afternoon, and congratulations, Larry, on the appointment. Hi, David. Thanks. Very well done. My question, I got a couple of questions on some of your strategic points you made. First, on the marketing, I think you mentioned that the brand messaging had maybe gotten off center in terms of your key points of differentiation. I was wondering if you could elaborate on what you meant by that and I guess what the changes you hope to make with the marketing and advertising strategy going forward. Yeah. Thanks, David. When we look back at and look at the marketing during last year, I mean, if you recall, you know, going back several years ago, we developed a brand book with a tagline. In that brand book highlighted what we're gonna focus on, the colors, the fonts, you know, everything about the advertising and marketing and how it's all gonna tie into this brand book. When we went back and looked at it, we realized, you know, also new colors were coming in. The tagline, if you look at the advertising last year, and you say each module basically has two sets of commercials, you know, one for dinner and one for the call it the entree, you know, family meals and entrees. You basically had 12, I'll call it commercials. We used Feed the Flame, our tagline, twice. I think the focus also got a little bit away from the food, and consumers using the food and got more into, quite frankly, naked people with nachos and those types of things. Yeah, it just felt like we were going a route that myself, along with the marketing team, just felt like we should get back to focusing on what we really had determined in our brand work that we had done, is get back to that and just a really focused on the food, on the brand book, you know, the target market consumers we're going after, and those types of things. That's what we're going back to. I mean, again, it's not, I wouldn't say a huge shift, but it is getting back to the fundamentals of what we believe really differentiates the brand. Got it. When does your new, I guess, your evolved approach begin? Is it already started or is that on the come? It really starts here in the next module. Let me just highlight. You know, we're really excited about the next module we're on. It's one of the most unique products the business has launched and served to our customers. It's capturing a trend that is very big out here in California and I think other Hispanic markets, and that is, it's a beef birria product. It centers around this great beef that we have sourced, and then it's dipped into a Mexican consommé juice or sauce, the birria. You dip it into that sauce. It's a fantastic product. Like I said, it's become very big out here in California, so we are super excited about it and looking forward to the success that we think we're gonna have with this product. That'll get more into really focusing in on the food. You know, really nothing cute about the advertising. It speaks for itself, and you can already have fun with it just from the dipping. Really looking forward to that. That to me is really where we start getting back to the more consistent advertising, more focused on the brand, the quality of the food. We wanna make sure also all our advertising is when people see the ad, they know it's Pollo Loco and it doesn't get too far off track from what we've traditionally done. Great. Thank you. One more question on the development outlook. I know you mentioned having some setbacks or not making as much progress on the franchising side. I was wondering, I think previously you had talked about getting to a mid-single digit type unit growth for the system, and I wanted to ask, is that still the goal? What type of timeframe do you think you need to establish that type of growth on a consistent basis? Well, Dave, that is still the goal. You know, I mean, not 2013. 2023 is still the goal. I think, like I said in the previous call, that's certainly a challenging goal, so it may be that we get to a run rate towards the back end of 2023. But like we said, we're pushing the pedal to the metal, a lot of resources this first quarter to really raise our game on that. You know, we're not shifting the goal at this point, 2023, but admittedly, that is a more, I'll call it, challenging goal than I would have said a year ago. Got it. Thank you very much. Thanks, David. Our next question is coming from the line of Andy Barish with Jefferies. Please proceed with your questions. Hey, Larry. My congrats as well. Thanks, Andy. Just wondering, you kind of knew, you know, 4Q, 1Q were gonna be sort of tough on the margin side of things. Do you have the visibility, you know, in your plan to kind of see, you know, progression as we move through the rest of the year? Yeah, my- Excuse me. On On margin improvement. Yeah, yeah, no. Yeah, I got it. I figured that's what you're talking about, Andy. Yes, but of course, the volatility in commodities, you know, I say yes with a caveat. You know, if things stay, you know, according to what we think is going to happen, then I would see progression during the year, especially as we look to take more price and as we hopefully implement some of these cost savings initiatives that we have planned. Gotcha. Very helpful. When you think about sort of pricing as you move through this year, I think you've mentioned, you know, family meals are already priced above the $20 mark for a lot of your franchisees. Is that something you're testing in the company-owned stores to move up on that important product in the mix? Yeah. Of the 3% price I mentioned, really 2% is what I would call, you know, our straight menu price increases. A percentage point of that is what we're expecting from the restructuring of our family meals on the menu. We're moving forward with that, and that will be this next module, which launches, I guess, in a week or so. That will be done, and we will be off the $20 price point, which most of our franchisees have moved off of. I'd say the other one that we're really now evaluating is, you know, we do fire grilled combos, you know, several things on the menu at $5. You know, we're looking at that and saying, "Well, do you come off that price point as many franchisees have done, or do you restructure it in a way that, from a food cost perspective is better?" That's a piece of work that's going on now, and it's one of, you know, the many, I'll call it, cost initiatives that we have going on in the business. Gotcha. Just one final one on sort of the balancing of renewed innovation just with the improvements you know the brand has made in terms of some of the operational simplifications over the last couple of years. How do you know, make sure you know, keep some of that efficiency and productivity while still you know exciting the customer with some new products? Yeah. Well, that's what all the work going on, as I mentioned, earlier on the call, bringing in additional resources to really manage the product development pipeline. You know, we are really ramping up our consumer research, you know, putting new products in front of those consumers, making sure that we're gonna have a lot more success in our limited time offers. In terms of the efficiency piece, it's really looking at, you know, the number of ingredients that we put in products. You know, I think many times we put too many ingredients in products or probably more than necessary. I mean, they're fantastic products, but, you know, do we need everything we put in them? From a consumer experience, do they really notice it? From an employee perspective, they know that they're more complicated to make. You know, the other thing that we're reevaluating and we're doing research on is you're probably familiar, you know, most of our LTOs, we always do three new items. So if we're doing a new burrito, we do three new burritos. I think the early research says, well, you may only need two burritos. You don't really need that third one. So there's just a lot of work going on there around not only really dramatically improving the new products and the chances of them being big successes, but also around, you know, how do we simplify things to make it easier in the restaurants to execute. Thanks. Very, very helpful call. Okay. Thanks, Andy. Thank you. As a reminder, you may press star one to ask a question at this time. The next question comes from the line of Zackfia Sharon with William Blair. Hi, it's Matt Curtis on for Sharon. First a question on comps. If you kind of take the trend line through February twenty-third and just extrapolate that, I'm wondering what you expect for comps for the full quarter. The reason I ask is just 'cause the comparisons they get so much tougher in March. Yes, they do. That's why as I talk about comps for the quarter, you know, in March, while our period three, the comp growth gets more challenging. The other more challenging thing that we see in period three is a disconnect on the lapping. Last year, we did six modules. This year, we're doing five modules. One of those module launches took place, actually a couple weeks ago. You see, the lapping of that even makes it a little more challenging. I don't wanna get into an actual comp forecast for the quarter, but you're correct. I mean, the fact that we're seeing comp over 7% through February, the March comps get a little more challenging as we came out of COVID last year. Having said that, what we are seeing is if you look at the average unit volume lines in our business, you know, those are growing nicely, you know, coming out of COVID, you know, really strong. As I highlighted on the call, you know, we tracked over $2 million of annual AUVs. If you look at, you know, our franchisees in L.A., they're now up around, they probably average $44,000 a week. So we're seeing nice sales growth, which is one of the things I'm also looking at as we get into March. Circling back to price. I think I heard you say you're running about a 8% price benefit here in the first quarter. Are the franchisees being more aggressive on price right now? I just ask because of the disparity in comps between franchise and company-owned. More generally, how have consumers reacted to the price increases so far? Yes. First on the franchisee side, it's always a little difficult to judge exactly, you know, what pricing they've taken. The thing we use and what we look at is average check, because that's generally a good guideline for, you know, what pricing is being taken by our franchisees. What you actually see is the gap between the company average check and franchisee average check has been very consistent and is consistent now. I mean, it's about $1 more on the average check for franchisees. That indicates to us that they basically have taken pricing at roughly the same levels as we have. When you look at performance, a big part of the gap between company and franchise performance is really all transactions. I mean, if you look at average check growth, it's basically the same. It's transaction growth. That just comes from the impact that, you know, COVID has had on our business, not just this year, the prior years, the staffing challenges we have. You know, we're fixing those things, and we're making progress. To me, one of the upsides we have on the company side is we improve operations. We should keep closing that gap with franchisees on the same-store sales side, and we should start getting more rapid sales growth than, say, the franchisees should. Now, I hope the franchisees maintain it, and we keep growing and accelerating our growth, but we should have more upside on the company side as we continue to improve our operations. In terms of consumer pushback, you know, it's difficult to read through COVID, especially on the company side. I would say right now, we're not really seeing it. We're seeing, you know, if you look at the pricing we've taken versus average check growth, there's probably, you know, two-three point gap there, meaning we've taken more price than average check has increased. A lot of that is basically what we expected, which is, you know, as consumers are coming back, people going back to work, you know, our lunch business and entree business are growing at a more faster rate than dinner. There's a natural mix shift that you're gonna get as, you know, you maintain your dinner business, but you're gaining your growth more from your lunch and entree side of the business. If I look at the franchisees, I certainly don't see any pricing pushback given their transaction growth, on that side of the business, so I don't see any pushback from consumers there. Okay. Thanks for that. A last one from me. It looks like you're managing labor very well with the company-owned restaurants. Is that primarily a function of turnover being down sequentially, or have you discovered new efficiencies that may be helping you out more on the labor front? No, I don't think it's anything special. I mean, we've always done a very good job of managing labor in our business. In fact, you know, what I would hope to see or expect to see, you know, here over the next several weeks and months is that we should be reducing overtime and meal breaks penalties. That had been a pretty sizable cost in the business. Those are driven by the fact that we've had challenges staffing our restaurants. I expect that to actually come more in line to what we've seen historically. From an efficiency standpoint, you know, I don't see much different what we're doing today than we've done in the past. Okay, great. Thanks very much, and good luck in the new role. Oh, thank you. Thank you. At this time, we've reached the end of the question and answer session. I'll now turn the call over to Larry Roberts for closing remarks. Yeah, no, I'd just say, you know, thanks, everybody, for joining the call today. Really appreciate it. I would just highlight again, you know, as we see challenges on the inflation front and the staffing front, where we're making some big progress, I step away from the business and am, you know, just super excited about the prospects. When I look at our sales performance, the things we're doing in the business to really continue to drive that sales growth. You know, one thing I'd like to mention that I didn't get across on the call is just it's not just the sales growth that we're seeing in California, it's really across a broad spectrum of our markets. I mean, almost all of our markets are seeing good sales growth and good comp growth, which is another reason why I just highlight this because it just highlights the strength of El Pollo Loco. Again, see some challenges ahead on the cost side, but from a, you know, where the brand stands and from a sales perspective, I'm super excited about where we stand. Again, thanks everybody for joining the call, and I hope you have a great night. Thank you. This will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time.