Succession Success: Lee Alvarez, Jr. takes the reins at the family business

Name: Lee Alvarez, Jr. 

Title: CEO

Company: Leemar United Group

No. of units: 14 El Pollo Loco

Age: 47

Family: Wife, 4 sons, 1 daughter

Years in franchising: 28

Years in current position: 12

Lee Alvarez, Jr. didn’t have to look very far for franchise inspiration. That’s because his father, Lee Alvarez, Sr. had worked in the field as a regional manager at El Pollo Loco before becoming a successful El Pollo Loco multi-unit franchisee in Southern California.

The senior Alvarez acquired his first El Pollo Loco in 1994. His son says that he and his siblings grew up watching their father maintain high quality and great service in his restaurants as he continued to build the business and acquire more locations. That was the same year the younger Alvarez got his first chance to work in his father’s restaurant—and it’s where he learned the business from the ground up and began to think about his own future in franchising. 

Fast forward to 2010, when the junior Alvarez took the reins of the family business and became a franchisee. Today, he serves as president and CEO of Leemar United Group, a 14-unit El Pollo Loco franchisee organization. His father serves as CFO, and two partners, Nelson Amaya and Rolando Chicas, play critical parts in the organization.

Leemar United operates 11 El Pollo Loco locations in Southern California and three in Utah, where the company has an agreement to develop two more. Alvarez, Jr. says those will open in 2022. Most recently, Leemar signed a development agreement with El Pollo Loco for four units in Colorado.

“We will open our first El Pollo loco location in Denver in the second quarter,” says Alvarez, Jr. “It’s a conversion store. Then we will have three more locations to open in that market.” And that’s not all: The company is looking at acquiring three locations of another franchise concept early this year.

PERSONAL

First job: Domino’s Pizza.

Formative influences/events: My father becoming a franchisee.

Key accomplishments: After acquiring our El Pollo Loco locations early on, we got to build our first location from the ground up and open it in 2002.

Biggest current challenge: Staffing our restaurants with employees who take pride and ownership.

Next big goal: To complete our development agreement in Utah and Colorado. We have two more stores to open in Utah and a total of four to open in Colorado.

First turning point in your career: Being promoted to a multi-unit manager.

Best business decision: Taking on the challenge of expanding beyond California and into other markets (Utah and Colorado).

Hardest lesson learned: Value your employees before it’s too late.

Work week: Typically 55 hours.

Exercise/workout: I have a good metabolism. Honestly, I need to make more time for it.

Best advice you ever got: Your words are very powerful; think before you speak.

What’s your passion in business? Helping employees gain experience and develop skills they can apply later in their careers.

How do you balance life and work? It is very difficult, but I have a very understanding family that has supported me. I dedicate the weekends to my family.

Guilty pleasure: Being my own boss and taking the occasional family day.

Favorite book: The One Minute Manager by Ken Blanchard.

Favorite movie: “The Pianist.”

What do most people not know about you? As a hobby, I like to play the drums.

Pet peeve: People who do not keep their word.

What did you want to be when you grew up? A commercial airline pilot.

Person I’d most like to have lunch with: God.

MANAGEMENT

Business philosophy: Take care of others and they will take care of you.

Management method or style: I trust my management team to make their own decisions and learn from their mistakes.

Greatest challenge: Covid-19.

How do others describe you? Understanding but firm.

One thing I’m looking to do better: Improve my business relationship with our local communities.

How I give my team room to innovate and experiment: Empower them to make the best decisions to make our guests and employees happy.

How close are you to operations? I work on operations on a daily basis by communicating with my district managers.

What are the two most important things you rely on from your franchisor? Support and innovation.

What I need from vendors: Accuracy, reliability, and communication.

Have you changed your marketing strategy in response to the economy? How? Yes, we have had to invest more heavily in local store advertising.

How is social media affecting your business? Immensely! The fact that guests have the ability to let the world know in a matter of seconds how good or bad their visit was has changed the way we operate.

How do you hire and fire? Hire slow and fire fast!

How do you train and retain? One-on-one training with follow-up. We offer competitive pay, aggressive incentives, and good benefit packages.

How do you deal with problem employees? Coach, develop, and discipline.

Fastest way into my doghouse: Dishonesty.

COVID-19

How has Covid-19 affected your business? It greatly affected the staffing at all our locations. We went from having an excess number of employees to having only enough to keep our dining rooms open.

How have you responded? Increased pay rates and aggressive hiring incentives.

What changes do you think will be permanent? Keeping our higher pay rates and our improved employee benefit package.

BOTTOM LINE

Annual revenue: $30.7 million.

2022 goals: Increase sales at least 10%.

Growth meter: How do you measure your growth? Sales and development.

Vision meter: Where do you want to be in 5 years? 10 years? In 5 years, diversifying into different concepts. In 10 years, operating in at least four different states.

Do you have brands in different segments? Why/why not? It is in the works.

How is the economy in your regions affecting you, your employees, your customers? Inflation is leading to higher wages, which has led us to price increases. We will need to find a balance to continue making it work.

Are you experiencing economic growth in your market? Fortunately for us, 2021 was a very good year.

How do changes in the economy affect the way you do business? We are making adjustments on a daily basis. We are forced to change with the times.

How do you forecast for your business? Yearly sales and profits.

What are the best sources for capital expansion? Real estate investments and having great relationships with our financial institutions.

Experience with private equity, local banks, national banks, other institutions? Why/why not? We have a longstanding relationship with our local banks.

What are you doing to take care of your employees? We are offering free meals to all team members, monthly incentives, and improved benefits.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? We are closely managing costs. Our main focus has been internal development and retention of employees to lower turnover and increase productivity.

What laws and regulations are affecting your business and how are you dealing with them? Workers’ compensation costs continue to increase, making it more difficult to operate. Covid mandates continue to be an issue in most locations.

How do you reward/recognize top-performing employees? Monthly and quarterly incentives, including paid vacation time. Also, daily recognition of accomplishments rewarded with gift cards.

What kind of exit strategy do you have in place? Honestly, I don’t. We have such a great relationship going back so many years with our franchisor that none is needed at this time.