UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 26, 2004
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM               TO

COMMISSION FILE NUMBER 333-116310

Real Mex Restaurants, Inc.

(Exact name of Registrant as specified in its charter)

DELAWARE	13-4012902
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4001 Via Oro Avenue, Suite 200, Long Beach, CA	90810
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:   (310) 513-7500
Securities registered pursuant to Section 12(b) of the Act:   NONE
Securities registered pursuant to Section 12(g) of the Act:   NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes o No ý

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant is not applicable as no public market for the voting stock of the registrant exists.

As of March 18, 2005, Real Mex Restaurants, Inc. had outstanding 300,016 shares of Class A Common Stock, par value $0.001 per share, and 15,867 shares of Class B Common Stock, par value $0.001 per share.

DOCUMENTS INCORPORATED BY REFERENCE:

None

FORWARD-LOOKING STATEMENTS

This report includes “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”).  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,” or “could” or words or phrases of similar meaning. They may relate to, among other things: our liquidity and capital resources; legal proceedings and regulatory matters involving our Company; food-borne illness incidents; increases in the cost of ingredients; our dependence upon frequent deliveries of food and other supplies; our vulnerability to changes in consumer preferences and economic conditions; our ability to compete successfully with other casual dining restaurants; our ability to expand; and anticipated growth in the restaurant industry and our markets.

These forward looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause actual results to differ materially from trends, plans or expectations set forth in the forward looking statements. These risks and uncertainties may include these risks and uncertainties and the risks and uncertainties described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors” contained in Item 7 of this report.  Given these risks and uncertainties, we urge you to read this report completely and with the understanding that actual future results may be materially different from what we plan or expect. 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.

PART I

ITEM 1.BUSINESS

Our Company

We are one of the largest full service, casual dining Mexican restaurant chain operators in the United States in terms of number of restaurants.  As of December 26, 2004, we had 125 restaurants, located principally in California.  Our two primary restaurant concepts, El Torito and Acapulco, offer a large variety of traditional, innovative and authentic Mexican dishes and a wide selection of alcoholic beverages at moderate prices, seven days a week for lunch and dinner, as well as Sunday brunch.  Both restaurant concepts feature fresh, high quality and flavorful foods, served in casual atmospheres.  For fiscal 2004, we generated revenues of $325.0 million and same store sales increases of 5.5%.  Additionally, for fiscal 2004 we generated net income of $13.6 million and cash flow from operations of $20.5 million.

Our Restaurant Concepts

El Torito (59.5% of fiscal 2004 restaurant revenues).  Founded in 1954, El Torito has been a pioneer in the full service, casual dining Mexican restaurant segment in California in terms of number of restaurants.  As of December 26, 2004, El Torito operated 74 restaurants, including six premium El Torito Grill restaurants, and was the largest full service, casual dining Mexican restaurant chain in California.  El

Torito is dedicated to fresh, quality ingredients and authentic, made-from-scratch Mexican cuisine, including sizzling fajitas, hand-made tamales and traditional Mexican combination platters.  We feature authentic regional specialties created by our executive chef, Pepe Lopez.  El Torito restaurants are modeled after a traditional Mexican hacienda.  The readers of the Orange County Register, a leading Los Angeles-area newspaper, have voted El Torito as the “Best Mexican Restaurant” four years in a row and featuring the “Best Sunday Brunch” eleven years in a row.  Lunch and dinner entrees range in price from $6.79 to $16.99 with an average check of $18.87 for fiscal 2004.

El Torito restaurants are primarily free standing buildings.  The restaurants average approximately 8,500 square feet with average seating of approximately 250 in the dining area and 75 people in the cantina.  All but one of the El Torito properties are leased.

El Torito drives the traditionally slower dayparts of early evening and weekday traffic through Happy Hour offers and specialty theme menus.  During Happy Hour, guests enjoy value priced appetizers and drinks.  Our Pronto Lunch menu offers guests value priced, time sensitive entrees.  El Torito stimulates incremental traffic with value promotions such as Cadillac Margarita Mondays and our long standing Taco Tuesday programs where guests may enjoy grilled chicken or steak tacos in the cantina.

Acapulco (28.7% of fiscal 2004 restaurant revenues).  The first Acapulco restaurant opened in Pasadena, California in 1960.  As of December 26, 2004, Acapulco had 39 restaurant locations and was the third largest full service, casual dining Mexican restaurant chain in California in terms of number of restaurants.  Acapulco offers California style Mexican food featuring traditional favorites as well as seafood specialties such as grilled halibut, shrimp and crab entrees.  Acapulco also features a host of specialty drinks, including our signature house margarita made with premium Jose Cuervo Gold Tequila.  Lunch and dinner entrees range in price from $6.99 to $15.99 with an average check of $17.11 for fiscal 2004.

Acapulco restaurants are primarily freestanding and located in high-traffic urban and suburban areas.  Acapulco restaurants generally range in size from approximately 7,500 to 8,600 square feet with average seating of approximately 200 in the dining area and 75 people in the cantina.  Many locations have attractive outdoor patios.  All but one of the restaurant buildings are leased.  Acapulco currently utilizes three models for restaurant decor: Hacienda, Aztec and Resort.  The three styles, which are similar to one another, have allowed our Company to match design and capital expenditures with each location’s physical plant and the site’s customer demographics.  A consistent appearance is achieved through similar exterior signage and the use of Mexican furnishings and vibrant primary color schemes in interior design throughout all Acapulco units.

Acapulco benefits from long-standing, value oriented day-part programs designed to drive incremental traffic during slow periods.  Beginning with Sunday brunch, guests can indulge in a champagne brunch with a variety of fresh soups, chilled salads, a taco bar with handmade tortillas, a made to order taco bar and a variety of traditional Mexican favorites.  Weekday value promotions include Happy Hour, Margarita Mondays, Kids Eat Free on Tuesdays and a lunch buffet, for time sensitive guests.

Other Restaurant Concepts (11.8% of fiscal 2004 restaurant revenues).  As of December 26, 2004, we operated 12 additional restaurant locations, most of which are also full service Mexican formats, under the following brands: Las Brisas; Casa Gallardo; El Paso Cantina; GuadalaHarry’s; Who Song & Larry’s; Hola Amigos and Keystone Grill.  We acquired most of these restaurants in connection with the acquisition of El Torito Restaurants, Inc.

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On January 11, 2005, we completed the acquisition of 69 Chevys Fresh Mex® restaurants and five Fuzio Universal Pasta® restaurants, and assumed franchise agreements relating to 37 franchised Chevys Fresh Mex restaurants and five franchised Fuzio Universal Pasta restaurants (the “Chevys Acquisition”).  The purchase price for the Chevys Acquisition was approximately $77.9 million in cash and the assumption of certain liabilities, plus the issuance of Real Mex securities to J.W. Childs (as defined herein).  See “Recent Developments” herein.  Unless otherwise provided in this report, references to “we”, “us” and “our Company” refer to Real Mex Restaurants, Inc. and our consolidated subsidiaries without giving effect to the Chevys Acquisition, and the financial data and other information contained in this report does not include historical financial information of the Chevys Fresh Mex and Fuzio Universal Pasta business (“Chevys”).

Industry Overview

The National Restaurant Association estimates that the restaurant industry generated sales of $440.1 billion in 2004, its 13th consecutive year of real sales growth, and predicts that changes in lifestyles and demographics, as well as consumer eating patterns, will continue to provide long-term industry growth.  The Association expects the restaurant industry to grow at an average annual rate (including new restaurants) of approximately 4.6% through 2010.  In addition, the Association expects that by 2010, 53% of the funds spent on food will be spent away from home, which is an increase over the 46% spent in 2003.

According to the Association 2003 Consumer Survey, 91% of adults indicated they enjoy going to restaurants.  Moreover, 75% of adults agreed that going out to a restaurant with family or friends gives them an opportunity to socialize and is a better way to make use of their leisure time than cooking and cleaning up.

Most of our restaurants are located in California.  The California Restaurant Association estimates that the restaurant industry in California generated sales of $46.4 billion in 2004, a 5.2% increase versus 2003.  The National Restaurant Association projects 2005 California restaurant sales of $51.5 billion in 2005 and projects that California will be the state posting the highest restaurant sales volume in 2005.

Business Strengths

Fresh, Authentic, Mexican Food.  Our food and beverage offerings range from guest favorites such as sizzling fajitas, hand-made tamales and traditional Mexican combination platters to authentic regional specialties created by our executive chef.  Our executive chef makes regular visits to small villages throughout many regions of Mexico to identify new flavors and recipes, and introduces distinct dishes to our restaurant guests.  We believe these freshly prepared, made-from-scratch items underscore our authenticity.  We prepare all our recipes with fresh, high quality ingredients, from our salsa to our sizzling fajitas.  El Torito is known for tableside preparations, including our most popular appetizer, our guacamole, which is made to our guests’ specifications at their table.  Our food is complemented by a variety of specialty drinks, including our house margarita, made with premium Jose Cuervo Gold Tequila.

Service.  We train our servers to follow a service program designed to achieve fast and consistent service while also promoting a casual and festive atmosphere.  Our service program outlines procedures, such as the server’s first approach to the guest, product recommendations throughout the visit, timing and manner of food delivery, plate clearing, payment processing, and bidding the guest farewell.  Throughout the day, managers are responsible for generating energy and enthusiasm throughout their restaurants by circulating and visiting with guests at their tables.  Our primary goal is to ensure that every guest leaves fully satisfied, thereby promoting repeat visits.

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Commitment to Operational Excellence.  In 2004, we achieved increases in several key attributes of the guest’s dining experience at El Torito including taste, appearance, price/value, quality, cooked to order, portion size, temperature, and overall satisfaction, as measured by an El Torito guest satisfaction survey conducted in July 2004.  We did not achieve the same improvement in customer satisfaction at Acapulco, which we believe is primarily due to the change in our marketing strategy for Acapulco from one of discounting, to a food, service and brand platform.  We intend to continue to improve these key attributes by building upon the foundation of improved employee training programs and refined menu development and execution.

Internal Production, Purchasing and Distribution Facilities.  We centralize purchasing and distribution for the majority of our raw ingredients, fresh products and alcoholic beverages, and manufacture food products through two facilities located in Southern California.  The purchasing and distribution facility, encompassing approximately 67,000 square feet, enables us to order and deliver food items and ingredients on a timely basis.  We have been able to leverage our purchasing power and reduce delivery costs, thereby contributing to our restaurant gross margins.  Our manufacturing facility, encompassing approximately 33,000 square feet, produces certain high volume items for our restaurants including soups, baked goods and sauce bases, enabling us to maintain food quality and consistency while reducing costs.  This facility also manufactures specialty products for sales to outside customers, marketed under the Real Mex Foods™ label as well as co-packaged under other branded names.  Both of these facilities have additional capacity to allow for growth in our distribution operations and production for outside customers.

Proven Management Team and Experienced Board of Directors.  We are led by a management team with extensive experience in all aspects of restaurant operations.  Our management team has an average of more than 20 years of experience in the restaurant industry.  Our Chief Executive Officer, Fred Wolfe, is a long-time veteran of our Company, having served a total of 19 years with us.  From 1997 to 2001, Mr.  Wolfe served as Chief Operating Officer of California Pizza Kitchen, Inc. (“CPK”) and, together with the other top members of CPK’s management team, successfully engineered CPK’s return to profitability and initial public offering.  In addition, a majority of our Directors have extensive management experience in the restaurant or food industry.

Business Strategy

Our primary business objective is to increase same store sales and total revenues through brand positioning, new menu and product innovation, and new restaurant openings.

Effectively Communicate Our Brand Positioning.  At El Torito, we intend to continue to promote our authentic regional specials through in-restaurant and local advertising.  At Acapulco, we have historically utilized a high level of discounting to drive guest traffic.  In fiscal 2004, we reduced the frequency of coupons by 17% as compared to fiscal 2003 and circulation of coupons by 68.2% as compared to fiscal 2003, while increasing same store sales and profitability.  We intend to continue to reduce our coupon discount strategy and emphasize product quality and service.

Continued Commitment to Product Development and Menu Innovation.  With the introduction of the El Torito “Real Mex” menu in December 2002, we upgraded the quality and freshness of multiple menu ingredients.  In 2003, we introduced a rotating menu of authentic regional specialties and upgraded our house margarita with premium Jose Cuervo Gold Tequila.  In 2004, we introduced five new regional Chefs Specials menus highlighting the regions of Puebla, Veracruz, Oaxaca, Sinaloa and Mexico City.  We plan to continue regularly updating our menus to improve the taste, quality and freshness of items and to continue to meet our customers’ expectations.  In April 2004, we introduced a new menu with enhanced recipes and higher quality ingredients in our Acapulco concept restaurants.  In addition to

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improving quality, we also streamlined this menu and experienced an average decrease in preparation time of over 30%, which translated into quicker table turns and higher sales.

Open New Restaurants.  To leverage our strong brand recognition and take advantage of our attractive unit economics, we plan to open new El Torito or El Torito Grill restaurants in and near our existing markets, primarily using internally generated cash flow.  Our new store prototype is expected to be approximately 7,500 square feet with an additional approximately 1,200 square foot patio.  Our El Torito restaurants that are similar in format averaged revenues of $2.8 million fiscal 2004.  Our net cash investment for a typical El Torito restaurant is generally between $1.4 million and $2.0 million, including pre-opening costs, depending on the level of landlord contributions.  Our target pre-tax, cash-on-cash return on new restaurants is in excess of 30%.  To successfully execute this strategy, we intend to leverage the extensive experience our management team has acquired opening new restaurants for our Company as well as other restaurant chains.  In 2004, we signed leases for three additional new El Torito restaurants in California, of which one was opened in 2004 and the other two are scheduled to open in 2005.  In December 2004 we opened our first new El Torito restaurant in five years, located in Encinitas, California.  Additionally, in February 2005, we signed a lease for an El Torito restaurant location which is expected to open in 2006.

Introduce New Products Through New Channels.  We manufacture bulk food packages and individually wrapped retail products under the Real Mex Foods™ label, as well as co-package these products under other branded company names.  In 2003, we developed the brand Real Mex Foods™ to market our manufactured products to outside customers.  We plan to expand this area of our business as we continue to develop a core group of standard products for retail sales including premium quality burritos, enchiladas and tamales.  We currently sell direct to or package for fast food and casual restaurants, amusement parks, club stores, and food service, retail, vending and institutional customers.  We plan to continue expanding this business to include other products and to market these products to additional customers in these and other business segments.

Purchasing and Distribution

We seek to obtain the highest quality ingredients, products and supplies from a variety of reliable sources at competitive prices.  We centralize purchasing of most of our food ingredients, products and supplies, and in December 2003, we moved the purchasing and distributing of these items to our new purchasing and distribution facility.  Our purchasing and distribution facility enables us to order and distribute food items on a timely basis, enabling delivery of fresh products to our restaurants.  In addition, we obtain our beer from a variety of state regulated distributors who deliver directly to our restaurants.

Employees

As of December 26, 2004, we had approximately 7,680 employees.  Of these employees, approximately 6,710 were employed as restaurant hourly team members, 665 as restaurant managers, 135 as distribution and production facility employees, and 170 as executive, senior, and general office staff.  None of our workforce is unionized.

Restaurant Staffing.  Restaurants are assigned between three and five managers - typically, a general manager, one or more assistant managers and one chef.  The average restaurant employs approximately 55 team members - approximately 35% of whom are in kitchen positions and 65% in guest service positions.  The actual number of team members in each restaurant varies depending on sales volume, physical plant design, and unique operational needs.

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Turnover.  We believe one of our strengths is the relative stability of our employee staff.  We believe that in fiscal 2004 our hourly turnover of 75.6% was better than the industry average, and our management turnover of 27.3% was comparable to the industry average.  Our restaurant management is heavily tenured, with Regional Directors averaging approximately 15 years, General Managers averaging approximately 11 years and Managers averaging more than 7 years.  Hourly employee tenure averages more than 4 years.  Other highly skilled positions such as chefs average 14 years with the Company.

Competition

The food service industry is competitive and affected by external changes such as economic conditions, disposable income, consumer tastes, and changing population and demographics.  Competitive factors include: food quality, variety and price; customer service; location; the number and proximity of competitors; decor; and public reputation.  We consider our principal competitors to be family dining venues and casual dining operations.  Like other food service operations, we follow changes in both consumer preferences for food and habits in patronizing eating establishments.  We intend to continue to expand into the specialty food market by selling directly to or co-packaging for restaurants, food service companies and other customers and face competition from other food service companies, many of which are more established than us.

Government Regulation

Our business, including each of the restaurants we operate, is subject to extensive federal, state and local government regulation, including those relating to, among others, public health, sanitation and safety, zoning and fire codes.  A failure to comply with one or more regulations could result in the imposition of sanctions, including the closing of facilities for an indeterminate period of time, or third party litigation, any of which could have a material adverse effect on our Company and its results of operations.  We are also subject to laws and regulations governing our relationships with employees, including the Fair Labor Standards Act, the Immigration Reform and Control Act, minimum wage requirements, overtime, reporting of tip income, work and safety conditions and other regulations governing employment.  Because a significant number of our employees are paid at rates tied to the federal and California state minimum wage, an increase in the minimum wage would increase our labor costs.  An increase in the minimum wage rate or employee benefits costs could have a material adverse effect on our results of operations.

Our restaurants’ sales of alcoholic beverages are subject to regulation in each state in which we operate.  Typically our restaurants’ licenses to sell alcoholic beverages must be renewed annually and may be suspended or revoked at any time for cause.  Alcoholic beverage control regulations relate to various aspects of daily operations of our restaurants, including the minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing and inventory control, handling and storage.  In fiscal 2004, approximately 28% of our restaurant revenues were attributable to the sale of alcoholic beverages, and we believe that our ability to serve alcohol is an important factor in attracting customers.  The failure of any of our restaurants to timely obtain and maintain liquor or other licenses, permits or approvals required to serve alcoholic beverages or food could delay or prevent the opening of, or adversely impact the viability of, the restaurant, and we could lose significant revenue.

Our restaurants are subject in each state in which we operate to “dram shop” laws, which allow a person to sue us if that person was injured by an intoxicated person who was wrongfully served alcoholic beverages at one of our restaurants.  A judgment against us under a dram shop law could exceed our liability insurance coverage policy limits and could result in substantial liability for us and have a material adverse effect on our profitability.  Our inability to continue to obtain such insurance coverage at reasonable costs also could have a material adverse effect on us.

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Our food manufacturing operations are subject to extensive regulation by the United States Department of Agriculture (“USDA”) and other state and local authorities.  Our facilities and products are subject to periodic inspection by federal, state and local authorities.  We believe that we are currently in substantial compliance with all material governmental laws and regulations and maintain all material permits and licenses relating to our operations.  We are required to have a USDA inspector on site at our manufacturing facility to ensure compliance with USDA regulations.  Nevertheless, there can be no assurance that we are in full compliance with all such laws and regulations or that we will be able to comply with any future laws and regulations in a cost-effective manner.  Failure by us to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, all of which could have a material adverse effect on our business, financial condition or results of operations.

We are also subject to the U.S.  Bio-Terrorism Act of 2002 which, among other things, requires us to provide specific information about the food products we ship in the U.S.  and to register our manufacturing facilities with the United States Food & Drug Administration (“FDA”).  In addition, we are subject to the Nutrition Labeling and Education Act of 1990 and the regulations promulgated there under by the FDA.  This regulatory program prescribes the format and content of certain information required to appear on the labels of food products.

Additionally, restaurants and other facilities utilize electricity and natural gas, which are subject to various federal and state regulations concerning the allocation of energy.  Our operating costs have been and will continue to be affected by increases in the cost of energy.

Environmental Matters

Our operations are also subject to federal, state and local laws and regulations relating to environmental protection, including regulation of discharges into the air and water.  Under various federal, state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on or in such property.  Such liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances.  Although we are not aware of any material environmental conditions that require remediation by us under federal, state or local law at our properties, we have not conducted a comprehensive environmental review of our properties or operations and no assurance can be given that we have identified all of the potential environmental liabilities at our properties or that such liabilities would not have a material adverse effect on our financial condition.

Recent Developments

On January 11, 2005, we completed the acquisition of substantially all of the assets of Chevys, Inc. and certain of its subsidiaries (the “Sellers”) out of the Sellers’ Chapter 11 bankruptcy proceeding, including 69 Chevys Fresh Mex® restaurants and five Fuzio Universal Pasta® restaurants.  In addition, we assumed franchise agreements for 37 franchised Chevys Fresh Mex restaurants and five franchised Fuzio Universal Pasta restaurants.  The purchase price for the Chevys Acquisition was approximately $77.9 million in cash and the assumption of certain liabilities, including ordinary course post-petition current liabilities of the Sellers, approximately $6.3 million of letters of credit and approximately $0.8 million of other indebtedness.  The cash portion of the purchase price was financed with $75.0 million of borrowings under a new senior unsecured term loan credit facility and cash on hand.  In addition, as part of the consideration for the Chevys Acquisition, we issued to J.W. Childs Equity Partners L.P. and its affiliate, JWC Chevys Co-Invest, LLC (collectively, “J.W. Childs”), in their capacity as unsecured creditors of the Sellers, an aggregate of 41,360 shares of our Class A Common Stock, 2,064 shares of our Series A 12.5% Cumulative Compounding Preferred Stock, 1,393 shares of our Series B 13.5%

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Cumulative Compounding Preferred Stock, 1,946 shares of our Series C 15% Cumulative Compounding Participating Preferred Stock and options to purchase 3,485 shares of our Class A Common Stock.

Chevys Fresh Mex is a full service casual dining Mexican restaurant concept which offers a large variety of fresh Mexican dishes and a wide selection of margaritas and originated the Fresh Mex® concept in Mexican cooking.  In terms of number of restaurants, Chevys Fresh Mex is the second largest full service casual dining Mexican restaurant chain in California and one of the largest in the United States.  Fuzio Universal Pasta is a full service casual dining restaurant concept featuring noodle-based international pasta and full bars promoting specialty martinis.  The Chevys Fresh Mex restaurants are located primarily in California and in 16 other states and the Fuzio Universal Pasta restaurants are located in California and two other states.  According to the Sellers, for fiscal 2004, Chevys generated revenues of $212.9 million.  Chevys Fresh Mex restaurants accounted for 96.0% of the total fiscal 2004 restaurant revenue of Chevys and Fuzio Universal Pasta restaurants accounted for 4.0% of fiscal 2004 restaurant revenue of Chevys.  During fiscal 2004, 98.4% of revenue from Chevys Fresh Mex restaurants was derived from company-owned restaurants while the remaining 1.6% was derived from royalties from franchised restaurants.  During fiscal 2004, 97.8% of revenue from Fuzio Universal Pasta restaurants was derived from company-owned restaurants while the remaining 2.2% was derived from royalties from franchised restaurants.

As a result of the Chevys Acquisition, we employed approximately 5,000 former Chevys employees.  As of January 12, 2005, approximately 4,570 of these employees were employed as restaurant hourly team members, 400 as restaurant managers, and 30 as executive, senior and general office staff.  In addition to the leased Chevys Fresh Mex and Fuzio Universal Pasta restaurant properties, we also assumed the lease for Chevys’ property located in Emeryville, California, which had been used as Chevys’ corporate headquarters prior to the Chevys Acquisition.

ITEM 2.PROPERTIES

As of December 26, 2004, we owned two of our restaurant locations and leased the remaining 123.  We believe that we have reasonably priced and stable lease agreements.  Our leases have terms that expire between 2005 and 2027 (excluding renewal options not yet exercised) and have an average remaining term of approximately 12 years, including options.  All of our restaurants are Company operated.

Our restaurant locations by concept and state as of December 26, 2004, are as follows:

Restaurant Concept	Restaurants
El Torito:
California	71
Oregon	1
Arizona	2
Total El Torito	74
Acapulco:
California	38
Oregon	1
Total Acapulco	39
Other Restaurant Concepts(1)	12
Total Restaurants	125

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(1)Our other restaurant concepts are located in five states including California, Missouri, Illinois, Indiana and Washington.

We also lease an approximately 32,000 square foot dedicated manufacturing facility located in Santa Fe Springs, California and an approximately 67,000 square foot warehouse and distribution facility located in Buena Park, California for our subsidiary, Real Mex Foods, Inc.

Our corporate headquarters are located in Long Beach, California in an approximately 32,000 square foot leased facility.

Our owned and certain of our leased real property is pledged to secure indebtedness outstanding under our senior credit facility and our Senior Secured Notes due 2010.

ITEM 3.LEGAL PROCEEDINGS

We are periodically a defendant in cases involving personal injury and other matters which arise in the normal course of business. While any pending or threatened litigation has an element of uncertainty, we believe that the outcome of these lawsuits or claims, individually or combined, will not materially adversely affect the consolidated financial position, results of operations or cash flows of our Company.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of fiscal 2004, no matters were submitted to a vote of stockholders through solicitation of proxies or otherwise.

PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There is currently no established public trading market for our outstanding common stock.

Holders

The approximate number of record holders of each of our classes of common stock as of March 18, 2005 was as follows:

Class A Common Stock: 50

Class B Common Stock: 1

Dividends

In fiscal 2004, we did not pay any dividends on our common stock.  Our ability to pay dividends is restricted by certain covenants contained in our secured and unsecured senior credit facilities, as well as certain restrictions contained in our indenture relating to our Senior Secured Notes due 2010.

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ITEM 6.SELECTED FINANCIAL DATA

The following table sets forth selected historical consolidated financial and other data of our Company.  The selected historical consolidated financial data has been derived from our Company’s audited consolidated financial statements for each of the fiscal years ended December 2004, 2003, 2002, 2001 and 2000, and the fiscal year ended October 2000.  On October 30, 2000, we elected to change the date of our fiscal year-end to the last Sunday in December.  As a result of the change in our fiscal year, our consolidated financial statements include the three month period from October 2, 2000 through December 31, 2000. The twelve month periods ended October 1, 2000 and December 30, 2001 each consist of 52 weeks.  This data presented below should be read in conjunction with, and is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto appearing elsewhere in this report.

									Three months		Fiscal Year
	Fiscal Year Ended								ended		ended
	2004		2003		2002		2001		Dec. 31, 2000		Oct. 1, 2000
	($ in thousands)
Statement of Operations Data:
Restaurant revenues	$	314,157	$	307,278	$	310,094	$	322,857	$	79,746	$	161,107
Other revenue	10,787		4,714		2,285		2,149