part) to the Website; and (vi) disable or terminate the Website without Franchisor having any liability to Franchisee.

b.    The Website may include one or more interior pages that identifies restaurants operated under the El Pollo Loco Marks, including the Restaurant, by among other things, geographic region, address, telephone number(s), and menu items. The Website may also include one or more interior pages dedicated to franchise sales by Franchisor and/or relations with Franchisors investors.

c.    Franchisor may, from time to time, establish the Franchisee Page. As used herein, the term Franchisee Page shall mean one or more interior pages of the Website dedicated in whole or in part to Franchisees Restaurant. Franchisor may permit Franchisee to customize or post certain information to the Franchisee Page, subject to Franchisees execution of Franchisors then-current participation agreement, and Franchisees compliance with the procedures, policies, standards and specifications that Franchisor may establish from time to time. Such participation agreement may require the Franchisee to pay a reasonable fee (not to exceed $1,000.00 per year, which maximum shall increase at a rate of 3% per year for the term of this Agreement) for the privilege of having a Franchisee Page, and may include, without limitation, specifications and limitations for the data or information to be posted to the Franchisee Page, customization specifications, the basic template for design of the Franchisee Page, parameters and deadlines specified by Franchisor, disclaimers, and such other standards and specifications and rights and obligations of the parties as Franchisor may establish from time to time. Any modifications (including customizations, alterations, submissions or updates) to the Content made by Franchisee for any purpose will be deemed to be a work made for hire under the copyright laws, and therefore, Franchisor shall own the intellectual property rights in and to such modifications. To the extent any modification does not qualify as a work made for hire as outlined above, Franchisee hereby assigns those modifications to Franchisor for no additional consideration and with no further action required and shall execute such further assignment(s) as Franchisor may request.

d.    Without limiting Franchisors general unrestricted right to permit, deny and regulate Franchisees participation on the Website in Franchisors sole discretion, if Franchisee shall breach this Agreement, or any other agreement with Franchisor or its Affiliates, Franchisor may disable or terminate the Franchisee Page and remove all references to the Restaurant on the Website until said breach is cured.

21.6    Franchisee acknowledges that, in connection with the operation of the franchise business, the Company will be disclosing confidential information and trade secrets to Franchisee. Franchisee further acknowledges that its knowledge of, and access to, the Companys formulae, recipes, processes, products, techniques, know-how and other proprietary information, including without limitation the Manual and the El Pollo Loco System (collectively referred to as the Confidential Information), are derived entirely from the material disclosed to Franchisee by the Company. Franchisee acknowledges and agrees that at all times and in all respects, the Confidential Information is a trade secret of the Company and that Franchisee has only a license to use the Confidential Information according to the provisions of this Agreement.

a.    Franchisee, and each officer, director, shareholder, member, manager, partner, and other equity owner, as applicable, of Franchisee, if Franchisee is an Entity, agrees to maintain fully and strictly the secrecy of all the Confidential

40

Information and to exercise the highest degree of diligence in safeguarding the Confidential Information during and after the term of this Agreement. Franchisee shall divulge the Confidential Information only to Franchisees employees and only to the extent necessary to permit the efficient operation of the Restaurant during the effective term of this Agreement. After the expiration or termination of this Agreement, Franchisee shall not divulge the Confidential Information to any person or entity, nor shall Franchisee use the Confidential Information in any manner.

b.    It is expressly agreed that the ownership of all of the El Pollo Loco Marks and the Confidential Information is and shall remain vested solely in the Company. Nothing contained in this Agreement shall be construed to require the Company to divulge to Franchisee any secret processes, formulae, ingredients or other information, except the material contained in the Companys Manual and training materials.

21.7    To further protect the El Pollo Loco System while this Agreement is in effect, Franchisee and each officer, director, shareholder, member, manager, partner, and other equity owner, as applicable, of Franchisee, if Franchisee is an Entity, shall neither directly nor indirectly own, operate, control or have any financial interest in any other business which would constitute a Competitive Business (as hereinafter defined) without the prior written consent of the Company; provided further, that the Company may, in its sole discretion, consent to the Franchisees continued operation of any business already in existence and operating at the time of execution of this Agreement. In addition, Franchisee covenants that, except as otherwise approved in writing by the Company, Franchisee shall not, for a continuous, uninterrupted period commencing upon the expiration, termination or assignment of this Agreement, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for itself, or through or on behalf of, or in conjunction with any person, partnership, corporation or other entity, own, operate, control or have any financial interest in any Competitive Business which is located or has outlets or restaurant units within a radius of five (5) miles of the location of the Restaurant. The foregoing shall not apply to operation of an El Pollo Loco restaurant by Franchisee pursuant to another franchise agreement with the Company or the ownership by Franchisee of less than five percent (5%) of the issued or outstanding stock of any company whose shares are listed for trading on any public exchange or on the over-the-counter market, provided that Franchisee does not control or become involved in the operations of any such company. For purposes of this Section 21.5, a Competitive Business shall mean a restaurant or fast-food business which sells chicken or Mexican food products, which products individually or collectively represent more than twenty-five percent (25%) of the revenues from such restaurant or fast-food business operated at any one location during any calendar quarter.

21.8     In the event that any provision of this Section 21 shall be determined by a court of competent jurisdiction to be invalid or unenforceable, this Agreement shall not be void, but such provision shall be limited to the extent necessary to make it valid and enforceable.

41

22.	FRANCHISEE ASSOCIATION

The Company shall, on a periodic basis, consult with representatives of an independent franchisee association whose membership is comprised of at least fifty-one percent (51%) of all El Pollo Loco franchisees whose restaurants are located in the United States (the Franchisee Association) with respect to matters relating to marketing, training, operations and technology and the current El Pollo Loco image for remodels and new restaurants. While the recommendations of such representatives will be considered by the Company in making its decisions, such recommendations shall not be binding upon the Company and the Company shall have the final authority with respect to all such matters. The representatives of the Franchisee Association shall be referred to herein as the Franchisee Association Representatives. Each Franchisee Association Representative must be an El Pollo Loco franchisee who is in good standing under its franchise agreement or other agreement between franchisee and Company. The Franchisee Association may operate through one or more committees which committees may consult directly with the Company. Membership by a Franchisee in the Franchisee Association shall be voluntary.

For purposes of this Franchise Agreement, to qualify as the Franchisee Association, the association must have been formed for the primary purpose of representing the rights of franchisees, and membership in such association must be limited solely to El Pollo Loco franchisees, or officers, directors, partners or shareholders of El Pollo Loco franchisees, who in either case are not owned or controlled by El Pollo Loco or its parent, or any subsidiary or affiliate of El Pollo Loco.

The Company shall not prohibit nor restrict Franchisee from associating with other franchisees nor from forming, joining or participating in any franchisee trade association. The Company shall not retaliate against Franchisee because Franchisee engages in such activities. The Companys exercise and enforcement of its rights under any franchise agreement or the law shall not, by itself, constitute a breach of the Companys responsibilities under the preceding sentence.

23.	RESOLUTION OF DEVELOPMENT DISPUTES

Franchisee agrees that any dispute that arises out of a decision by the Company to develop or authorize development of a new restaurant shall be resolved solely in the manner contemplated by the Companys Procedures for Resolving Disputes Relating to the Development of New Restaurants, a copy of which is attached as Exhibit A and which is incorporated into this Agreement. Franchisee acknowledges that it shall have no claim or right under such process with respect to the development of a new restaurant unless such new restaurant would be located within Franchisees Notification Radius (as that term is defined in Exhibit A).

24.	MISCELLANEOUS PROVISIONS

24.1    In the event that Franchisee is comprised of more than one person, firm, corporation or other entity, Franchisees rights, privileges, interests, obligations and liabilities under this Agreement shall be joint and several with respect to such persons, firms, corporations or other entities.

42

24.2    If Franchisee is an Entity, Company will require, as a condition to the effectiveness hereof, the written guarantee and assumption of Franchisees obligations hereunder by any or all of the shareholders, members, partners, other equity owners, as applicable, of an Entity and or some other natural persons associated with Franchisee, the form of which is attached hereto as Exhibit C. The Company may also require that Franchisee maintain transfer instructions restricting a transfer on its records of any securities, partnership interests or other ownership interests in violation of the restrictions set forth in Section 17 and that each stock, partnership or other ownership certificate of Franchisee shall have conspicuously endorsed upon its face a statement in form satisfactory to the Company that further assignment or transfer thereof is subject to each of the restrictions imposed upon assignments by this Agreement.

24.3    All notices required under this Agreement shall be in writing and shall be either (i) served personally; (ii) sent by certified or registered United States mail to, the party to be charged with receipt thereof; or (iii) by reputable overnight delivery service (FedEx and Airborne Express being deemed acceptable). Notices served personally are effective immediately on delivery, and those served by mail shall be deemed given forty-eight (48) hours after deposit of such notice in a United States post office with postage prepaid and duly addressed to the party to whom such notice or communication is directed. Notices served by overnight delivery shall be deemed to have been given the day after deposit of such notice with such service. The address for the Company shall be: Attention: General Counsel, El Pollo Loco, Inc., 3333 Michelson Drive, Suite 550, Irvine, California 92612, and the address for the Franchisee shall be:                                                                              . The Company or Franchisee may from time to time change its address for notice pursuant to this Section by giving a written notice of such change to the other party in the manner provided herein. Notwithstanding anything to the contrary contained herein, the Company may deliver bulletins and updates to the Manual by electronic means, such as by the internet (e-mail) or an intranet, if any, established by Company.

24.4    The receipt and acceptance by either party of any delinquent payment due hereunder shall not constitute a waiver of any other default. Except as provided by the foregoing, no delay or omission in the exercise of any right or remedy of either party upon any default by the other hereunder shall impair such right or remedy or be construed as a waiver of any term, covenant or condition of this Agreement to be performed by the other party. Any waiver of any other default must be in writing and shall not constitute a waiver of any other default concerning the same or any other term, covenant or condition of this Agreement.

24.5    The Companys consent to or approval of any act or conduct of Franchisee requiring such consent or approval shall not be deemed to waive or render unnecessary the Companys consent to or approval of any subsequent act or conduct hereunder.

24.6    The provisions of this Agreement are intended by the parties to be a complete and exclusive expression of their agreement. No other agreements, representations, promises, commitments or the like, of any nature, exist between the parties except as set forth or referenced herein. The provisions of this Agreement may not be contradicted by any other statement concerning the subject matter herein. Furthermore, this Agreement may not be amended or modified except by a written agreement signed by the parties hereto.

43

24.7    In the event of the bringing of any action by either party against the other arising out of or in connection with this Agreement or the enforcement thereof, or by reason of the breach of any term, covenant or condition of this Agreement on the part of either party, the party in whose favor final judgment is entered shall be entitled to have and recover from the other party reasonable attorneys fees to be fixed by the court rendering such judgment.

24.8    This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for the provisions in Section 21.5 covering competition following the expiration, termination or assignment of this agreement which shall be governed by the laws of the state in which the breach occurs. Except as provided in Section 23, the parties agree that any action brought by either party against the other in any court, whether federal or state, will be brought within the State of California. The parties hereby waive any right to demand or have trial by jury in any action relating to this Agreement in which the Company is a party. The parties consent to the exercise of personal jurisdiction over them by such courts and to the propriety of venue of such courts for the purpose of carrying out this provision, and they waive any objection that they would otherwise have to the same.

24.9    Except with respect to Franchisees obligation to indemnify the Company pursuant to Section 9.3 of this Agreement, the parties waive to the fullest extent permitted by the law any right to or claim for any punitive or exemplary damages against the other and agree that, in the event of a dispute between them, the party making a claim shall be limited to recovery of any actual damages it sustains.

24.10    Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions of this Agreement. Any prohibition against or unenforceability of any provision of this Agreement in any jurisdiction, including the state whose law governs this Agreement, shall not invalidate the provision or render it unenforceable in any other jurisdiction. To the extent permitted by applicable law, Franchisee waives any provision of law which renders any provision of this Agreement prohibited or unenforceable in any respect.

24.11    Franchisee recognizes the unique value and secondary meaning attached to the El Pollo Loco System, the El Pollo Loco Marks, the Confidential Information and the associated standards of operation and trade practices, and Franchisee agrees that any noncompliance with the terms of this agreement or any unauthorized or improper use will cause irreparable damage to the Company and its franchisees. Franchisee therefore agrees that if it should engage in any such unauthorized or improper use, during or after the term of this Agreement, the Company shall be entitled to both permanent and temporary injunctive relief from any court of competent jurisdiction in addition to any other remedies prescribed by law.

24.12    Franchisee shall grant no security interest in the franchise business or any of its assets, including the furniture, fixtures and equipment located in the Restaurant, unless the secured party agrees in writing with the Company that, in the event of any default by Franchisee under any documents relating to such security interest, the Company shall have the right and option to purchase the rights of the secured party in any such business, furniture, fixtures, equipment or assets upon the payment of the sums secured by such security interest and which are then due to such secured party.

44

24.13    Except for the express rights set forth at Section 23, nothing contained in this Agreement, whether express or implied, shall be deemed in any way to prevent or limit the Company and its subsidiaries and affiliates from opening and/or operating, or granting the right to any person to open and/or operate, restaurants in the immediate vicinity of or adjacent to the Restaurant. Franchisee understands and agrees that the Company or its subsidiaries or affiliates, in their sole discretion, may open and/or operate restaurants in any area they choose, or may authorize or license others to do the same, whether it is in competition with or in any other way affects the sales of Franchisee at the Restaurant.

24.14    This Agreement shall be binding upon and inure to the benefit of the parties hereto, their permitted heirs, successors and assigns.

24.15    This Agreement shall not be binding upon the Company unless and until it shall have been accepted and signed by authorized officers of the Company.

24.16    The parties intend to confer no benefit or right on any person or entity not a party to this Agreement, and no third party shall have the right to claim the benefit of any provision hereof as a third party beneficiary of any such provision.

24.17    (a) If following commencement of business at the Restaurant the Restaurant is damaged or destroyed to the extent that the Company determines that the Restaurant must be closed for repairs for more than sixty (60) days, or if the Location is taken by condemnation proceedings or Franchisees lease is terminated through no act or failure to act on its part (except the failure to utilize any available options to extend such lease, or Franchisees willful truncation of such lease), Franchisee may elect to relocate the Restaurant, terminate this Agreement, or in the case of a casualty, rebuild the Restaurant. Franchisee shall give notice of its intent to relocate, rebuild or terminate not later than forty-five (45) days following the date such casualty, condemnation or loss of lease occurs. If Lessee fails to give such written notification within such forty-five (45) day period, Franchisee shall be deemed to have elected to terminate this Agreement, and such termination shall be deemed effective within thirty (30) days following the date of such casualty, condemnation or loss of lease. In the event of such termination, Franchisee shall promptly comply with the requirements set forth at Sections 19.1 and 19.2.

(b) If Franchisee elects to rebuild, Franchisee shall, at its own expense, repair or reconstruct the Restaurant, and such construction shall be completed and the Restaurant shall reopen for business not later than twelve (12) months following the date the casualty occurred. The minimum acceptable appearance for the reconstructed Restaurant will be that which existed just prior to the casualty; however, every effort shall be made to have the reconstructed Restaurant reflect the then current image, design and specifications of new El Pollo Loco restaurants.

(c) If Franchisee elects to relocate the Restaurant, it must execute Companys current form of Franchise Agreement within thirty (30) days following the occurrence of the casualty or its loss of possession of the original Location; provided, however, that the term of such new agreement shall be equal to the remaining term of this Agreement and Franchisee shall not be required to pay a new initial franchise fee. Franchisee will submit a replacement site for the new Restaurant, in accordance with the time frames indicated in the then-current form of Franchise Agreement, and shall be

45

located in an area defined as a radius surrounding the existing site of the Restaurant, the exact dimensions of which shall be reasonably negotiated between Franchisee and the Company taking into consideration the rights of other existing and potential franchisees. If the Company approves the new site, Franchisee shall either acquire or lease the site and design, construct and furnish the Restaurant in conformance with the design and construction requirements imposed by the Company for new El Pollo Loco restaurants. The new Restaurant must be open for business not later than twelve (12) months following the date of the casualty or loss of possession of the original Location.

25.	EFFECTIVE DATE

25.1    This Agreement shall be effective as of the date it is executed by the Company.

26.	ACKNOWLEDGMENTS

26.1    Franchisee acknowledges that it has received a copy of the complete El Pollo Loco Uniform Franchise Offering Circular at least ten (10) business days prior to the date on which this Agreement was executed by Franchisee or payment of any monies to the Company and that Franchisee received this Agreement in the form actually executed at least five (5) business days prior to the date on which this Agreement was executed by Franchisee.

26.2    Franchisee acknowledges that it has read and understood this Agreement, the attachments hereto and the agreements relating thereto, if any, and that the Company has accorded Franchisee ample opportunity and has encouraged Franchisee to consult with advisors of Franchisees own choosing about the potential benefits and risks of entering into this Agreement.

27.	SIGNATURES

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first set forth above.

THE COMPANY:						FRANCHISEE:
EL POLLO LOCO, INC., a Delaware Corporation
By:						By:
By:						By:
Date:						Date:

46

EL POLLO LOCO FRANCHISE AGREEMENT

EXHIBIT A

Procedures for Resolving Disputes

Relating to the Development of New Restaurants

PROCEDURES FOR RESOLVING DISPUTES RELATING TO

THE DEVELOPMENT OF NEW RESTAURANTS

(June 1996)

TABLE OF CONTENTS

i

ii

PROCEDURES FOR RESOLVING DISPUTES

RELATING TO THE DEVELOPMENT OF NEW RESTAURANTS

ARTICLE I

STATEMENT OF PURPOSE; NATURE OF PROCEDURES

SECTION 1.1. Statement of Purpose. Disputes may arise between EPL and its franchisees concerning the development of new restaurants near existing restaurants. The objectives of the alternative dispute resolution procedures described in this document are first, to initiate open communication between EPL and its franchisees in order to avoid disputes concerning the development of new restaurants, and second, to resolve disputes concerning the development of new restaurants without resorting to litigation.

SECTION 1.2. Nature of Procedures. The alternative dispute resolution procedures described in this document are private and consensual proceedings and constitute the sole and exclusive rights and remedies for EPL franchisees with respect to New Restaurant Disputes (as that term is defined below). Neither such alternative dispute resolution procedures nor any notice request or other communication delivered in connection with alternative dispute resolution procedures constitutes an admission of encroachment.

ARTICLE II

DEFINITIONS

ADR Deposit means a deposit in the amount of two thousand five hundred ($2,500) United States Dollars.

ADR Procedures means, collectively, the alternative dispute resolution procedures described herein, as they may be modified from time to time, including negotiation, Mediation and the Arbitration Procedures.

Allowable Transfer Factor has the meaning specified in Section 7.6.2.

Arbitration Agreement means an agreement, substantially in the form of Exhibit B, whereby all parties thereto agree to resolve the New Restaurant Dispute through the ADR Procedures set forth in Article VI and VII.

Arbitration Procedures means the arbitration procedures described in Article VII.

Arbitration Proceedings has the meaning specified in Section 7.1.

Arbitration Session means an informal arbitration session conducted by the Arbitrator.

51

Arbitrator means an arbitrator selected pursuant to, Section 7.2.1.

Designated Representative means an employee of EPL designated by EPL to participate in the meetings required herein.

Developer means either EPL or a new or proposed franchisee that desires to develop a New Restaurant at a Target Site.

Dispute Resolution Entity means JAMS or another third party dispute resolution organization designated by EPL and consented to by Objecting Franchisee, which consent shall not be unreasonably withheld, which is qualified to create a panel of mediators and arbitrators.

EPL means El Pollo, Loco, Inc., a Delaware corporation.

Existing Site means the specific site approved by EPL for the operation of an Objecting Franchisees El Pollo Loco restaurant and which is described in a franchise agreement between the Objecting Franchisee and EPL.

Gross Percentage has the meaning specified in Section 7.6.4.

Independent Consultant means one of several independent vendors identified by EPL who are experienced in analyzing demographics and predicting the transfer of sales from an existing restaurant to a new restaurant.

JAMS means J.A.M.S./Endispute, a California corporation, organized to resolve business disputes without resorting to litigation.

Mediation means the procedure of mediation described in Article VI.

Mediation Meeting means an informal mediation session held before the Mediator pursuant to Section 6.4.

Mediator means a mediator selected pursuant to Section 6.3.

New Restaurant means a proposed restaurant to be developed at a Target Site.

New Restaurant Dispute means a dispute among any Objecting Franchisee, EPL and any Developer concerning the development of a New Restaurant at a Target Site, including any claims asserted by such Objecting Franchisee relating to encroachment or an unreasonable impact on sales.

New Restaurant Rights means that right of an Objecting Franchisee to locate a Target Site for a New Restaurant within the Target Area.

52

Notification Radius means, with respect to each Existing Site, the area within a successively larger ring radiating from the location of such Existing Site which contains, by U.S. Government Bureau of Census survey, a population of at least 50,000 people determined as follows:

(i) if a ring with a radius of one mile radiating from the location of such Existing Site contains a population of at least 50,000 people, then such one-mile ring, and

(ii) if a ring with a radius of one mile radiating from the location of such Existing Site contains a population of less than 50,000 people, then a ring with the radius increased by successive one-half mile increments until such ring includes a population of at least 50,000 people.

Notification Radius Franchisees means all EPL franchisees who own or lease an Existing Site for which a Target Site falls within such franchise restaurants Notification Radius and who have entered into a franchise agreement with EPL for such Existing Site which contains the ADR Procedures.

Objecting Franchisee means any Notification Radius Franchisee that submits an objection Notice pursuant to Section 3.1.2.

Objection Notice means a notice submitted by a Notification Radius Franchisee to EPL of its objection to the development of a New Restaurant on the grounds of unreasonable impact and which conforms to the requirements set forth at Section 3.1.2.

Preliminary Meeting has the meaning specified in Section 3.1.2 (a).

Pre-Mediation Negotiations means good faith negotiations between EPL and an Objecting Franchisee occurring prior to Mediation.

Reduced Profit has the meaning specified in Section 7.6.4.

Royalty Deferral means the conditional deferral of payment of EPL royalty fees (but not advertising fees, such advertising fees to remain payable during such period of conditional deferral) payable under the Franchise Agreement for the Objecting Franchisees restaurant pursuant to Section 4.2.

Study means a trade area study prepared by an Independent Consultant analyzing the impact, if any, that a New Restaurant may have on an Objecting Franchisee.

Study Deposit means a deposit in the amount of five thousand ($5,000) United States Dollars.

53

Target Area means an area with distinct geographic boundaries as agreed upon by EPL and Franchisee, such boundaries to be no greater than a two mile radius.

Target Site means a specific site for the development of a New Restaurant.

Transferred Sales has the meaning specified in Section 7.6.4.

Year Factor means a factor selected by the Arbitrator which will not be (a) less than one (1) or (b) greater than eight (8).

ARTICLE III

PRE-DEVELOPMENT COMMUNICATION

SECTION 3.1. Procedures Prior to Development of New Restaurant.

3.1.1 When a Target Site for a New Restaurant is identified by EPL, EPL will notify all Notification Radius Franchisees.

3.1.2. If any Notification Radius Franchisee wishes to object to the New Restaurant on the grounds of unreasonable impact, it will submit to EPL an Objection Notice within fifteen (15) days of its receipt of the notice given by EPL pursuant to Section 3.1.1 above. The Objection Notice must be in writing and specifically identify the Existing Site and state the reasons why the New Restaurant will unreasonably impact the Objecting Franchisees franchise restaurant at the Existing Site. The Objection Notice must also include a summary report, in the form attached hereto as Exhibit A, which sets forth such information as the Objecting Franchisee believes is relevant to EPLs decision on whether a New Restaurant should be developed at a Target Site. Notwithstanding the foregoing, a Notification Radius Franchisee shall not be entitled to submit an Objection Notice or otherwise proceed hereunder if such franchisee or its affiliate will own directly or indirectly any interest in the New Restaurant or the entity owning the New Restaurant. In addition, an Objecting Franchisees rights hereunder shall automatically terminate with respect to any franchise restaurant located within a Notification Radius if the franchise agreement for such restaurant is terminated by EPL or such Objecting Franchisee for any reason.

(a)

Within fifteen (15) days after receipt by EPL of an Objecting Franchisees Objection Notice, such Objecting Franchisee and a representative of EPL will meet at the Objecting Franchisees offices or at such other location as is mutually agreed upon by the Objecting Franchisee and EPL (the Preliminary Meeting). At such Preliminary Meeting the participants will review the objections of the Objecting Franchisee and attempt to resolve any New Restaurant Dispute.

(b)	(i) It, at or after the Preliminary Meeting between EPL and the Objecting Franchisee, EPL elects to continue with the New Restaurant, it shall give to the

54

Objecting Franchisee following such Preliminary Meeting a written notification of its desire to proceed. Thereafter, the Objecting Franchisee may request a Study for each of its franchise restaurants located at Existing Sites within the Notification Radius and that the results of each such Study be considered by EPL prior to making a final decision with regard to the New Restaurant. The Objecting Franchisee will cooperate with all reasonable requests for information by EPL and the Independent Consultant in the preparation of each Study.

(ii) If an Objecting Franchisee requests a Study, such Objecting Franchisee will bear the cost of such Study subject to its right to a refund of such amounts or a portion thereof pursuant to Section 3.1.2(b)(iv) below. Such Objecting Franchisee will deposit with EPL, within five (5) business days of its receipt of the notification from EPL described at Section 3.1.2 (b)(i) above, a Study Deposit for each of such Objecting Franchisees restaurants for which a Study is requested to be held in escrow by EPL. EPL will, upon receipt of the Study Deposit for an existing franchise restaurant of an Objecting Franchisee, order a Study from the Independent Consultant for such franchise restaurant. A copy of the results of such Study will be forwarded directly to the Objecting Franchisee and EPL by the Independent Consultant. The failure by the Objecting Franchisee to deposit with EPL the Study Deposit for any existing franchise restaurant of such Objecting Franchisee within the allotted time frame will relieve EPL of any obligation to order the study for such franchise restaurant or to delay its decision with regard to the New Restaurant as provided below.

(iii) Upon receipt of a Study Deposit from the Objecting Franchisee for an existing franchise restaurant, EPL will delay announcing any final decision to proceed with the New Restaurant until the fifth business day after the results of the Study relating to such franchise restaurant have been submitted to EPL and the Objecting Franchisee. During such five business day period, EPL and the Objecting Franchisee will consider the results of the Study in determining whether to continue developing the New Restaurant, in the case of EPL, or pursuing its objection, in the case of the Objecting Franchisee.

(iv) If the Study relating to an existing franchise restaurant of the Objecting Franchisee projects a transfer of sales from the Objecting Franchisees restaurant to the New Restaurant of twelve (12%) percent or more, EPL will refund the Study Deposit relating to such restaurant to the Objecting Franchisee and EPL will bear the cost of such Study. If such projected transfer of sales is less than twelve percent (12%), such Study Deposit will be applied against the cost of such Study, and either (A) any shortfall between such Study Deposit and the actual cost of such Study will be paid by the Objecting Franchisee or (B) any balance in such Study Deposit after payment of the cost of such Study will be returned to the Objecting Franchisee.

(v) The Objecting Franchisee and EPL agree that the results of any Study and the twelve percent (12%) threshold specified in Section 3.1.2 (b)(iv) above

55

are not determinative of any matter other than for the determination of which participant bears the cost of such Study and whether the objecting Franchisee qualifies for Royalty Deferral and interim financial support as set forth in Sections 4.2 and 4.3.2 below and may not be used for any other purposes in connection with the New Restaurant Dispute, including Mediation or the Arbitration Procedures.

3.1.3. After consideration of the information obtained by and/or provided to EPL concerning the New Restaurant and its projected impact, if any, on the Objecting Franchisees restaurant, including the Study, if applicable, and before EPL approves a Target Site for development, EPL will notify in writing all Objecting Franchisees and the Developer that EPL will either:

(a) not approve the Target Site; or

(b) grant to an Objecting Franchisee the New Restaurant Rights; or

(c) approve the development of a New Restaurant at the Target Site by the Developer as proposed.

Notwithstanding anything contained herein to the contrary, including the right of a Notification Radius Franchisee to submit an Objection Notice, EPL at all times retains the absolute and unilateral right to elect any of the options specified in Clause (a), (b) and (c) above, including, specifically, the right to approve the development of a New Restaurant.

3.1.5. If EPL grants to an Objecting Franchisee the New Restaurant Rights, such Objecting Franchisee will have fifteen (15) days after receipt of the notice given under Section 3.1.3 to accept the New Restaurant Rights by executing and delivering to EPL an Agreement identifying the Target Area for the New Restaurant and such other terms as may reasonably be agreed upon by the parties. Such Objecting Franchisee will have the right, but not the obligation, to accept the New Restaurant Rights. If such Objecting Franchisee declines to accept the New Restaurant Rights, such Objecting Franchisee will not be deemed to have waived any rights to participate in the ADR Procedures.

3.1.6. Following the execution by Objecting Franchisee of a the Agreement referenced in Section 3.1.4 above, the Developer will be treated as a Notification Radius Franchisee if it operates a restaurant at an Existing Site and has executed a franchise agreement for that site containing the ADR Procedures meeting the criteria specified in the definition thereof; however, while the Developer generally has the right to participate in the ADR Procedures, it will not have the right to call for a Preliminary Meeting.

56

SECTION 3.2. New Restaurant Site in Jeopardy.

3.2.1. On occasion, the Developer must commit to acquire a Target Site for a New Restaurant prior to the results of the Study becoming available. In such cases, the Target Site for such New Restaurant may be considered by EPL to be in jeopardy.

3.2.2. A Target Site may be considered in jeopardy by EPL if, in the reasonable judgment of EPL:

(a)	the Site for the New Restaurant identified by the Developer is available for development by others for uses other than as an El Pollo Loco Restaurant;

(b)	the Site for the New Restaurant identified by the Developer is likely to become unavailable for development as an El Pollo Loco Restaurant due to any delay caused by the preparation of the Study; or

(c)	there is not an economically comparable alternative site available within the geographic area surrounding the Target Site.

EPL may also consider any other relevant information in making its determination.

3.2.3. If EPL determines that a Target Site is in jeopardy, EPL may develop or permit development of such site without waiting for the results of the Study. If EPL so elects, each Objecting Franchisee who has satisfied the requirements at Section 4.1.1 and Sections 4.1.3 through 4.1.5 below will be treated as if a Study had been conducted showing results in excess of twelve (12%) percent, and such Objecting Franchisee will be entitled to (a) Royalty Deferral, as defined in Section 4.2 below, and (b) quarterly meetings together with, if applicable, financial support, as described in Section 4.3 below.

ARTICLE IV

FINANCIAL SUPPORT DURING ADR PROCEDURES

SECTION 4.1. Conditions Precedent. The provisions of Sections 4.2 and 4.3 will apply with respect to an Objecting Franchisee if all of the following conditions are met:

4.1.1. Such Objecting Franchisee requests a Study and timely delivers the Study Deposit.

4.1.2. The Study projects a transfer of sales from such Objecting Franchisees restaurant to the New Restaurant of twelve (12%) percent or more of the Objecting Franchisees sales or, if a Target Site is in jeopardy, EPL makes an election pursuant to Section 3.2.3.

4.1.3. Such Objecting Franchisee is not granted the New Restaurant Rights.

57

4.1.4. Such Objecting Franchisee elects to pursue the ADR Procedures.

4.1.5. The New Restaurant opens for business.

SECTION 4.2. Royalty Deferral. If each of the conditions listed in Section 4.1 above have been met with respect to an Objecting Franchisee and if the Objecting Franchisee requests in writing, then commencing on the tenth (10th) day of the first (1st) calendar month following the opening of the New Restaurant, such Objecting Franchisee will be entitled to Royalty Deferral. The Royalty Deferral will apply to the royalty fees payable in respect of any month for which a decrease in sales, as compared to the same calendar month in the preceding calendar year, has occurred and will remain in effect until the conclusion of the ADR Procedures concerning the New Restaurant. The Royalty Deferral will be discontinued if Franchisee does not comply with each of the requirements of or otherwise discontinues its participation in the ADR Procedures. The granting of such Royalty Deferral or the making of a loan described in Section 4.3. below shall not be admissible as evidence or otherwise brought before the Mediator or the Arbitrator in any mediation or arbitration nor be deemed proof of an unreasonable impact.

SECTION 4.3. Quarterly Meetings.

4.3.1. As a further condition to an objecting Franchisees right to continue to receive Royalty Deferral pursuant to Section 4.2, each Objecting Franchisee and a Designated Representative will engage in quarterly meetings. In addition, the Objecting Franchisees right to continue to receive such Royalty Deferral, at least five (5) business days prior to each such meeting, such Objecting Franchisee will submit in writing to the Designated Representative (i) an up-to-date profit and loss statement, balance sheet and gross sales report for the trailing 12-month period and (ii) all other information and data relevant to the operation, sales and/or profits of such Objecting Franchisees restaurant, including any sales promotion activities.

4.3.2. If it is determined by both the Objecting Franchisee and the Designated Representative that additional financial support is necessary to enable the Objecting Franchisee to generate additional net cash flow in the current year from the operation of such Objecting Franchisees restaurant, EPL will loan to such Objecting Franchisee, with no interest, amounts to be determined by EPL to be sufficient to assist such Objecting Franchisee to achieve such additional net cash flow but not to exceed the net cash flow level obtained in the preceding year for the comparable period. Such Objecting Franchisee will execute one or more demand promissory notes, in the form of Exhibit C, evidencing such loan amounts.

4.3.3. If such Objecting Franchisee receives an award pursuant to Section 7.6.3 below or if the participants reach an agreement as set forth in Section 6.1.1, 6.7.2 or 7.5.3 below, the amount to be paid to such Objecting Franchisee pursuant to such Sections will be decreased by (a) the aggregate amount deferred as Royalty Deferrals pursuant

58

to Section 4.2 above plus (b) the aggregate unpaid principal amount of all loans made pursuant to Section 4.3.2 above.

ARTICLE V

INITIATION OF ADR PROCEDURES

SECTION 5.1. Initiation of ADR Procedures.

5.1.1. If EPL elects to approve the New Restaurant, then any Objecting Franchisee, EPL and the Developer shall proceed with premediation negotiations and, if necessary, mediation described in Article VI.

5.1.2. Upon conclusion of mediation as set forth in Section 6.8.1, such Objecting Franchisee may elect to proceed with the Arbitration Procedures. If such Objecting Franchisee elects not to proceed under the Arbitration Procedures, it shall withdraw from the ADR Procedures in the manner provided for at Section 5.3. If such Objecting Franchisee elects to proceed with the Arbitration Procedures, such Objecting Franchisee, EPL, and the Developer (if other than EPL) shall sign an Arbitration Agreement. At the time of signing the Arbitration Agreement by such Objecting Franchisee, such Objecting Franchisee will deposit with EPL the ADR Deposit to be held in escrow by EPL. The ADR Deposit will either be (a) applied against the costs and expenses of the Arbitration Sessions, (b) returned to such Objecting Franchisee pursuant to the Arbitrators decision, or (c) applied pursuant to the agreement of the participants. If such Objecting Franchisee elects to withdraw from the ADR Procedures and release EPL as to the claims relating to or arising out of the New Restaurant Dispute at any time prior to the appointment of the Arbitrator, the ADR Deposit (less any sums expended or committed to be expended by EPL in connection with the ADR Procedures) will be returned to such Objecting Franchisee. The failure of such Objecting Franchisee to execute the Arbitration Agreement or to deposit with EPL the ADR Deposit in a timely manner will relieve EPL, at EPLs sole discretion, of any obligation to resolve the New Restaurant Dispute through the ADR Procedures and will be deemed a waiver by an Objecting Franchisee of its rights hereunder.

SECTION 5.2. Monitoring Period. After the New Restaurant is opened for business, each of EPL and the Objecting Franchisee, at its own cost, will independently monitor the performance of such Objecting Franchisees restaurant for a period not to exceed twelve (12) months.

SECTION 5.3 Withdrawal from ADR Procedures. An Objecting Franchisee may, at any time, withdraw from the ADR Procedures upon delivery of a withdrawal notice to EPL and upon such withdrawal, an Objecting Franchisee will be deemed to release EPL as to the claims relating to or arising out of the New Restaurant Dispute.

59

ARTICLE VI

NEGOTIATION/MEDIATION PROCEDURES

SECTION 6.1. Pre-Mediation Negotiations.

6.1.1. EPL and the Objecting Franchisee will attempt, in good faith, to resolve any New Restaurant Dispute by Pre-Mediation Negotiation.

6.1.2. If the New Restaurant Dispute has not been resolved by negotiation prior to commencement of Mediation as set forth below, the participants will submit the New Restaurant Dispute to Mediation.

SECTION 6.2. Mediation Commencement.

6.2.1. Mediation will be mandatory and non-binding.

6.2.2. If the New Restaurant Dispute is resolved at the Preliminary Meeting, in the Pre-mediation Negotiations or otherwise, Mediation will be unnecessary. If, however, the New Restaurant Dispute remains unresolved, Mediation will commence following the opening of the New Restaurant within the time period set forth at Section 6.4.2.

SECTION 6.3. Mediator Selection. Subject to the provisions relating to mediators in Section 8.1, a mediator will be selected by the participants not later than one hundred eighty (180) days after the opening of the New Restaurant from a panel of three (3) candidates selected by the Dispute Resolution Entity from the region where the Target Site is located. If the participants cannot agree on the selection of a mediator from such panel, then the Dispute Resolution Entity will select a mediator from its other panel members (but not from such panel of three candidates) residing in the region where the Target Site is located.

SECTION 6.4. Mediation Meeting.

6.4.1. A Mediation Meeting will be held at a place and at a time agreeable to EPL, such Objecting Franchisee and the Mediator. The Mediator will determine and control the format and procedural aspects of the Mediation Meeting which will be designed to ensure that both the Mediator and the participants have an opportunity to hear an oral presentation of the other participants views on the New Restaurant Dispute. EPL and such Objecting Franchisee agree to cooperate in all respects with the Mediator. The participants will attempt to resolve the New Restaurant Dispute with the assistance of the Mediator.

6.4.2. The Mediation Meeting will be conducted not less than sixty (60) days nor more than one hundred twenty (120) days following the first anniversary of the opening of the New Restaurant.

60

6.4.3. The Mediator will be free to meet and communicate separately with each participant.

6.4.4. In the event that either participant requires a substantial amount of information in the possession of the other participant in order to adequately prepare for the Mediation Meeting, the participants will attempt, in good faith, to agree on procedures for the expeditious exchange of such information. If the participants fail to agree on such procedures, the Mediator will determine such procedures and which documents and information will be exchanged.

6.4.5. Each participant may be represented by one or more other persons, including its counsel, one or more of its business persons, an accountant and a financial consultant. At least one representative of each participant must have the authority to negotiate a settlement of the New Restaurant Dispute.

SECTION 6.5. Privileges of the Mediator.

6.5.1. The Mediator may freely express his views to the participants on the legal issues unless a participant objects to his doing so.

6.5.2. The Mediator may obtain assistance and independent expert advice with the agreement of the participants and at the participants expense.

6.5.3. The Mediator will not be liable for any act or omission in connection with the role of mediator, other than for his or her gross negligence or willful misconduct.

SECTION 6.6. Information Requested by Mediator.

6.6.1. The Mediator may request that the participants present, and each participant may elect to submit, a written summary of the New Restaurant Dispute to the Mediator with such additional information as the Mediator deems necessary to become familiar with the New Restaurant Dispute.

6.6.2 The Mediator may raise legal questions and arguments.

SECTION

6.7. Settlement through Mediation.

6.7.1. If the participants have failed to reach an acceptable settlement prior to the end of the Mediation Meeting, the Mediator, before concluding the Mediation Meeting, may submit to the participants a settlement proposal based on the same considerations to be used by an Arbitrator as set forth in Article VII which the Mediator deems to be equitable to both participants. Each of the participants will, in good faith, evaluate the proposal and discuss it with the Mediator. In the event that a settlement is not reached, neither the terms of the proposed settlement nor either partys refusal to agree thereto

61

shall be admissible in the Arbitration Proceedings nor brought before the Arbitrator in any way.

6.7.2. If a settlement is reached, the Mediator, or one of the participants at the request of the Mediator, will prepare a settlement agreement for execution by the participants. Such settlement agreement will be edited as necessary by all participants until it is mutually acceptable. When a mutually acceptable settlement agreement is completed, each participant will execute and deliver such settlement agreement.

SECTION 6.8. Conclusion of Mediation.

6.8.1. The participants will cooperate and continue to mediate until the Mediator terminates the Mediation. The Mediator will terminate the Mediation upon the earlier of (i) execution of a settlement agreement, (ii) a declaration by the Mediator that the Mediation is terminated, or (iii) completion of a full day Mediation Meeting unless extended by agreement of the participants.

6.8.2. If an Objecting Franchisee has elected to proceed to arbitration, the participants will proceed according to the Arbitration Procedures. If an Objecting Franchisee does not elect to proceed to arbitration, it shall withdraw from the ADR Procedures in the manner provided for at Section 5.3.

ARTICLE VII

ARBITRATION

SECTION 7. 1. Initiating Arbitration. The arbitration proceedings (the Arbitration Proceedings ) will be formally initiated by the execution of the Arbitration Agreement as provided in Section 5.1.2. Such Arbitration Agreement must be executed by the Objecting Franchisee and delivered to EPL within 30 days following the conclusion of the Mediation. Each Objecting Franchisee whose claim relates to the same Target Site is entitled to a separate Arbitration Session although the Arbitrator for each Arbitration Session will be the same.

SECTION 7.2. Arbitrator Selection and Duties.

7.2.1. A panel of three (3) arbitrator candidates from the general geographic area where the Target Site is located will be submitted to the participants not later than ten (10) days after the conclusion of the Mediation by the Dispute Resolution Entity. An arbitrator will be selected by the participants from the panel not later than thirty (30) business days after the execution of the Arbitration Agreement. If the participants cannot agree on an arbitrator from such three member panel, then the Dispute Resolution Entity will select the arbitrator from its other panel members (but not from such panel of three candidates) residing in the region where the Target Site is located. It the New Restaurant Dispute includes more than one Objecting Franchisee and such Objecting Franchisees cannot mutually agree on an arbitrator, each Objecting