You should read the following discussion together with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this filing.

Certain statements contained within this report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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. They may contain words such as "believe," "anticipate," "expect," "estimate," "intend," "project," "plan," "will," "should," "may," "could" or words or phrases of similar meaning.

These forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. 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 you 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 concerns about food-borne illnesses; negative publicity, whether or not valid; adverse public perception due to the occurrence of avian flu; increases in the cost of chicken; an ultimate adverse ruling in litigation involving trademark rights in Mexico, which could result in the imposition of significant monetary damages and the loss of such rights; our dependence upon frequent deliveries of food and other supplies; our sensitivity to events and conditions in the greater Los Angeles area; our ability to open new restaurants in new and existing markets; our reliance in part on our franchisees; our vulnerability to changes in consumer preferences and economic conditions; our ability to compete successfully with other quick service and fast casual restaurants; our ability to service our indebtedness; matters relating to employment and labor laws, labor shortages or increases in labor costs; our ability to renew leases at the end of their terms; the impact of federal, state or local government regulations relating to the preparation and sale of food, zoning and building codes, and employee, environmental and other matters; and our ability to protect our name and logo and other proprietary information. Actual results may differ materially due to these risks and uncertainties and those described in our Annual Report on Form 10-K (File No. 333-115644) as filed with the Securities and Exchange Commission on March 24, 2008.

We use a 52-, 53-week fiscal year ending on the last Wednesday of the calendar year. For simplicity of presentation, we have described the periods ended March 28, 2007 and March 26, 2008 as March 31, 2007 and 2008, respectively. 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 2007, which ended December 26, 2007, is a 52-week fiscal year. Fiscal year 2008 which will end December 31, 2008, is a 53-week fiscal year. References to "our restaurant system" 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 jointly with Intermediate, the "Company," "we," "us" and "our") owns, operates and franchises restaurants specializing in marinated flame-grilled chicken. Our restaurants are located principally in California, with additional restaurants in Arizona, Nevada, Texas, Illinois, Colorado, Connecticut, Georgia and Massachusettes. 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 March 31, 2008 and 2007, and December 26, 2007 are set forth below:

                           El Pollo Loco Restaurants

                               March 31,      December 26,      March 31,
                                 2008             2007            2007
             Company-owned             161               159            153
             Franchised                230               230            210
             System-wide               391               389            363

During the three months ended March 31, 2008, the Company opened 2 new restaurants. In that period, franchisees opened 2 new restaurants and closed 2 restaurants.

We plan to open approximately ten company-operated restaurants in 2008 and a moderately increasing number of company-operated restaurants in succeeding years. We believe our franchisees will open up to 40 new restaurants in 2008.

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 the 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 March 31, 2008, same-store sales for restaurants systemwide increased 1.8% over the 13 weeks ended March 31, 2007. 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 revenues) and contribute to advertising pools based on a percentage of their sales.

Increases in company-operated restaurant revenue are due to growth in the number of company-operated restaurants and to increases in same store sales, which may include price and transaction volume increases. We implemented menu price increases in January 2008 and January 2007. Many factors can influence sales at all or specific restaurants, including increased competition, strength of marketing promotions, the restaurant manager's operational execution, changes in local market conditions and demographics and the status of the economy. We believe that consumers are being affected by the economy more dramatically this year as they struggle with the sustained impact of significant higher gasoline costs, rising food prices, declining home values and the prospect of a recession.

Franchise revenue consists of royalties, initial franchise fees, help desk revenue and franchise rental income. Royalties average 4% of the franchisees' net sales. We believe that new franchise restaurant growth will increase as we sign development agreements with experienced franchisees in new and existing markets. As of April 28, 2008, we are legally authorized to market franchises in 50 states and we are pursuing opportunities in a number those states. We have entered into development agreements that have resulted in area development fees being recognized as the related restaurants open. We sublease facilities to certain franchisees and the sublease rent is included in our franchise revenue. This revenue exceeds rent payments made under the leases that are included in franchise expense. 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. It is subject to increase or decrease based on commodity cost changes and depends in part on the success of controls we have in place to manage product cost in the restaurants. In March 2007, we renewed two chicken contracts with terms ranging from one to two years at higher prices than the expiring contracts. One of these contracts provides a floor and ceiling price for the chicken we buy from the supplier. In March 2008 we renewed two chicken supply contracts with two of our suppliers for a term of one year at higher prices than the expiring contracts. We also contracted with a new supplier for a one-year term. We implemented menu price increases in January 2008 and January 2007 that have partially mitigated the impact of higher chicken prices. We expect the cost of chicken will continue to be negatively affected by the significant demand for corn and, due to competitive pressures, there is no assurance that we will be able to increase menu prices in the future to offset these increased costs. In the last year, corn prices, which are a primary feed source for chicken, have increased dramatically. A major driver of this increase is rapidly increasing demand for corn from the ethanol industry. There have been many new ethanol plants opening in the United States, and most of these plants use corn as the primary source of grain to make ethanol. When farmers plant more corn to take advantage of high prices, they may take land for wheat, soybeans, or other crops out of production which could negatively impact prices for our other commodities. The effect of higher oil prices on transportation costs also impact the cost of commodities. In addition, there has been a global increase in demand for corn and wheat, which has put pressure on grain prices worldwide. This increased demand on the nation's corn crop has had and may continue to have an adverse impact on chicken prices.

Payroll and benefits make up the next largest single expense. Payroll and benefits are subject to inflation, minimum wage increases and expenses for health insurance and workers' compensation insurance. A significant number of our hourly staff are paid at rates consistent with the applicable federal or state minimum wage and, accordingly, increases in the minimum wage will increase our labor cost. On September 12, 2006, the state of California passed legislation increasing the minimum wage in the state from $6.75 per hour to $7.50 per hour effective January 1, 2007. Additionally on January 1, 2008, the minimum wage in California increased to $8.00 per hour. The federal minimum wage will increase from $5.85 to $6.55 per hour effective July 24, 2008 and to $7.25 per hour effective July 24, 2009. The Company implemented a menu price increases at the beginning of fiscal 2007 and 2008 in order to partially mitigate the impact of the minimum wage increase. Workers' compensation insurance costs are subject to a number of factors, and although we have seen a reduction in the number of workers' compensation claims due to employee safety initiatives that we began implementing in fiscal 2002, we cannot predict whether this trend will continue and what the impact to our workers' compensation expense will be.

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 and provide the infrastructure to facilitate our growth. These expenses have been impacted by rating agency fees, directors and officers insurance, compliance with laws relating to corporate governance and public disclosure, and audit fees. In addition, general and administrative expense includes costs associated with disclosure controls and procedures and implementing the level of internal controls required for a company with registered securities.

Results of Operations

Our operating results for the 13 weeks ended March 31, 2007 and 2008 are
expressed as a percentage of restaurant revenue below:

                                       16
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                                             13 Weeks Ended
                                               March 31,

                                             2007       2008

Operating Statement Data:
Restaurant revenue                             100.0 %   100.0 %
Product cost                                    30.7      32.6
Payroll and benefits                            26.1      26.7
Depreciation and amortization                    4.5       4.5
Other operating expenses                        33.2      33.9
   Operating income                             12.5       9.7
Interest expense                                11.7      10.8
   Income (loss) before income taxes             0.8      (1.1 )
   Net income (loss)                             0.4      (0.7 )
Supplementary Operating Statement Data:
Restaurant other operating expense              21.2      22.1
Franchise expense                                1.6       1.5
General and administrative expense              10.4      10.3
Total other operating expenses                  33.2      33.9

13 Weeks Ended March 31, 2008 Compared to 13 Weeks Ended March 31, 2007

Restaurant revenue increased $3.9 million, or 6.2%, to $66.3 million for the 13 weeks ended March 31, 2008 from $62.4 million for the 13 weeks ended March 31, 2007. This increase was partially due to an additional $0.1 million in restaurant revenue resulting from a 0.2% increase in company-operated same-store sales for the 2008 period from the 2007 period. The positive impact from a price increase taken at the beginning of the year and an increase in average check more than compensated for a transaction decline in the first quarter. Restaurants enter the comparable restaurant base for same-store sales the first full week after that restaurant's 15-month anniversary. The increase in restaurant revenue was also due in part to $3.1 million in current year revenue from fourteen restaurants opened in 2006 and 2007, $0.3 million from two restaurants opened in 2008, $0.4 from a store that was closed for part of 2007 due to a fire and $2.0 million from five restaurants acquired from a franchisee in 2007 partially offset by lost sales of $2.0 million due to the sale of eight company restaurants to franchisees in 2007. The transaction decrease reflects intense competition and a general sales softness in the QSR industry, in part due to higher gas prices, recession fears and other economic factors that are expected to continue in 2008.

Franchise revenue increased $0.5 million, or 11.0%, to $4.9 million for the 13 weeks ended March 31, 2008 from $4.4 million for the 13 weeks ended March 31, 2007. This increase is primarily due to an increase in royalties resulting from a 3.1% increase in franchise same-store sales and also due to the increase in royalties from new franchise stores opened in the current period.

Product cost increased $2.4 million, or 12.5%, to $21.6 million for the 13 weeks ended March 31, 2008 from $19.2 million for the 13 weeks ended March 31, 2007. These costs as a percentage of restaurant revenue increased 1.9% to 32.6% for the 2008 period compared to 30.7% for the 2007 period. The increase is attributed to increased chicken and commodity costs and also due to heavier promotional discounting done in the current period.

Payroll and benefit expenses increased $1.4 million, or 8.4%, to $17.7 million for the 13 weeks ended March 31, 2008 from $16.3 million for the 13 weeks ended March 31, 2007. As a percentage of restaurant revenue, these costs increased 0.6% to 26.7% in 2008 from 26.1% for the 2007 period. This increase is primarily attributed to increased spending on manager training and the increase in the minimum wage.

Depreciation and amortization increased $0.2 million, or 6.8%, to $3.0 million for the 13 weeks ended March 31, 2008 compared to $2.8 million for the 13 weeks ended March 31, 2007. These costs as a percentage of restaurant revenue remained flat at 4.5% for the 2008 and 2007 periods.

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, increased $1.5 million, or 10.9%, to $14.7 million for the 13 weeks ended March 31, 2008 from $13.2 million for the 13 weeks ended March 31, 2007. These costs as a percentage of restaurant revenue increased to 22.1% for the 2008 period from 21.2% for the 2007 period. The increase in operating costs was due to a 0.4% increase in occupancy costs as a percentage of revenue, which was primarily a result of higher rent expense. The increase was also due to a 0.2% increase in utilities as a percentage of revenue which was due to higher gas prices in the current period. The increase in restaurant other operating expense was also due in part to a 0.1% increase in advertising expense as a percentage of revenue. Advertising expense each quarter may be above or below our planned annual rate of approximately 4% of revenue, depending on the timing of marketing promotion and the relative weights and price of media spending.

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 remained flat at $1.0 million the 13-week periods ended March 31, 2008 and March 31, 2007.

General and administrative expense increased $0.4 million, or 5.1%, to $6.9 million for the 13 weeks ended March 31, 2008 from $6.5 million for the 13 weeks ended March 31, 2007. General and administrative expense as a percentage of revenue decreased 0.1% to 10.3% for the 13 weeks ended March 31, 2008 from 10.4% for the 13 weeks ended March 31, 2007. The increase was primarily attributed to increased salaries and wages of $0.2 million due to increased headcount, an increase of $0.3 million in legal fees in the 2008 period, partially offset by a decrease of $0.1 million in corporate meetings expense due to timing.

Interest expense, net of interest income, decreased $0.1 million, or 2.1%, to $7.2 million for the 13 weeks ended March 31, 2008 from $7.3 million for the 13 weeks ended March 31, 2007. Our average debt balances for the 2008 period decreased to $256.8 million compared to $260.8 million for the 2007 period and our average interest rate decreased to 10.37% for the 2008 period compared to 10.74% for the 2007 period.

Our provision for income taxes consisted of an income tax benefit of $0.3 million and income tax expense of $0.2 million for the 13-week periods ended March 31, 2008 and 2007, respectively, for an effective tax rate of 37.1% for 2008 and 50.2% for 2007.

As a result of the factors above, we had a net loss of $0.5 million for the 13 weeks ended March 31, 2008 compared with net income of $0.2 million for the 13 weeks ended March 31, 2007, or (0.7)% and 0.4% as a percentage or restaurant revenue, for the 13 weeks ended March 31, 2008 and 2007, respectively.

Liquidity and Capital Resources

Our principal liquidity requirements are to service our debt and meet our capital expenditure needs. Our indebtedness at March 31, 2008 was $251.3 million. Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures will depend on our ability to generate cash 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 and available borrowings under the $25.0 million revolving portion of EPL's senior credit facility will be adequate to meet our future liquidity needs for at least the next twelve months.

In December 2007, our parent company, CAC, received a capital infusion of $45.0 million. On December 26, 2007, CAC made a $3.0 million capital contribution to EPL through intermediary subsidiaries which was used for normal operating purposes and capital expenditures. On January 25, 2008, CAC made an $8.0 million capital contribution to the Company. The Company used $7.9 million of these proceeds to repurchase a portion of the outstanding 14.5% senior discount notes due 2014 (see Note 9 to our Unaudited Condensed Consolidated Financial Statements) at a price that approximated their accreted value. The Company expects that CAC will make future capital contributions to the Company and EPL for acceleration of company-owned store growth and other corporate purposes.

In the 2008 three-month period, our capital expenditures totaled $4.5 million, consisting of $3.8 million for new restaurants, $0.4 million for capitalized repairs of existing sites, $0.2 million for construction costs related to our new training center, and $0.1 million related to other projects. We also had cash proceeds of $1.1 million from asset dispositions in the current period. As a result, net cash used in investing activities in the current period was $3.4 million.

Cash and cash equivalents decreased $0.6 million from $3.8 million at December 26, 2007 to $3.2 million at March 31, 2008. In the first three months of 2008, we made $1.3 million in principal repayments on EPL's term loan, and $2.5 million in payments to pay off borrowings under our revolving credit facility. In the first quarter of 2008 we did not have any borrowings under our revolving credit facility. We cannot assure you 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 facilities in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity 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. We cannot provide assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

As a holding company, the stock of EPL constitutes our only material asset. Consequently, 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 us and currently has restrictions that limit distributions or dividends to be paid by EPL to us. Furthermore, subject to certain restrictions, EPL is permitted under the terms of EPL's senior secured credit facilities and the indenture governing the 2013 Notes and 2014 Notes to incur additional indebtedness the terms of which may further restrict or prohibit the making of distributions, the payment of dividends or the making of loans by EPL.

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 investment to build new restaurants, remodel and replace or improve equipment in company-operated restaurants, and to acquire new restaurant information systems. We do not have significant receivables or inventories and we receive trade credit based upon negotiated terms in purchasing food and supplies. Funds available from cash sales and franchise revenue not needed immediately to pay for food and supplies or to finance receivables or inventories typically have been used for the capital expenditures referenced above and/or debt service payments under our existing indebtedness. We expect our negative working capital balances to continue to increase, based on the continuing growth of our business.

Operating Activities. We had net cash provided by operating activities of $6.8 million for the 13 weeks ended March 31, 2008 compared with $8.6 million for the 13 weeks ended March 31, 2007. The decrease in cash provided by operating activities was related to increased prepaid expenses and other current asset balances, changes in accounts payable balances, changes in the deferred income taxes and the net loss.

Investing Activities. We had net cash used in investing activities of $3.4 million for the 13 weeks ended March 31, 2008 compared with $3.2 million for the 13 weeks ended March 31, 2007. The increase in cash used in investing activities of $0.2 million was related to $0.7 million in increased expenditures, primarily for new store construction, partially offset by $0.5 million in proceeds received for asset dispositions.

Financing Activities. We had net cash used in financing activities of $4.0 million for the 13 weeks ended March 31, 2008 compared with $4.1 million for the 13 weeks ended March 31, 2007. The decrease of $0.1 million in each used in financing activities in the 2008 period was primarily attributable to the capital contribution of $8.0 that was received in the current period, partially offset by the cash used in the repurchase of the 2014 Notes of $7.9 million.

Debt and Other Obligations

On November 18, 2005, EPL entered into senior secured credit facilities with Intermediate, as parent guarantor, Merrill Lynch Capital Corporation, as administrative agent, the other agents identified therein, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, N.A., as lead arrangers and book managers, and a syndicate of financial institutions and institutional lenders. The senior secured credit facilities provide for an $104.5 million term loan and $25.0 million in revolving availability. As of March 31, 2008, EPL was in compliance with all of the financial covenants contained in its senior credit facility. In March 2007 we amended the credit facility to reduce the interest rate and to modify in our favor the terms of certain restrictive covenants.

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

. . .