Playing Chicken in Newport Beach

It’s not that Hersel Mangoli has awakened over the years in a cold sweat worrying about it. The cozy little chicken diner on Bristol Street in Newport Beach that he’d built from the ground up has done OK, and, after all, what were the chances that You-Know-Who would move into the neighborhood?

That question now is being answered. An office building that stood on a prime corner just 100 yards from Mangoli’s restaurant is gone and, in its place, the 800-pound gorilla has moved in.

Make that an 800-pound broiled chicken.

Every day now, Mangoli can look out the window of his small 800-square-foot diner and see a banner with the two words he hates: “Now open.” The banner hangs from an El Pollo Loco franchise that opened a couple months ago and, by Mangoli’s reckoning, threatens to snuff out his business.

“If you could name 100 businesses that you would have wanted to move in on that corner. . .” I said to Mangoli this week.

“El Pollo Loco would have been the last on the list,” he said, finishing my sentence and laughing.

You couldn’t blame Mangoli if he did a little “Casablanca” paraphrasing: “Of all the franchises in all the world, this one had to open next to mine.”

To get a handle on Mangoli’s rotten luck, you have to picture his place, the Chicken Broiler, as it nests in a little row of small storefronts off the main drag. You can see it driving down Bristol, but because it’s a one-way street, if you pass it the first time, chances are you aren’t going to circle around and return.

Mangoli’s problems are twofold: El Pollo Loco specializes in broiled chicken, as does Mangoli, and it has a fine reputation.

Bob Sandelman, president of a Brea market research firm that specializes in the restaurant industry, says El Pollo Loco consistently scores near the top in customer satisfaction. Because the chain is well-known and respected, a new outlet doesn’t have to worry about establishing a customer base.

As if Mangoli doesn’t know. In the two months since El Pollo opened, he says, business has slumped 25% to 30%. He’s convinced he’s not losing his regulars--many of whom he called by name when I visited him this week--but the drive-by business. Now when people drive by, they’ll see the beckoning familiarity of El Pollo Loco before getting to his place.

I’d feel worse for Mangoli if he weren’t detailing this dismal chain of events for me with what almost seems like a twinkle in his eyes. A regular customer who tipped me to Mangoli’s plight said the guy was charming, and he was right.

Now 37, Mangoli fled his native Iran during the Islamic revolution in 1979. A Jew, Mangoli didn’t think he’d be safe in the post-shah regime. Within four years of coming to America, he opened the restaurant after being convinced that broiled chicken--a relatively new concept then--would be a winner in the restaurant industry.

“I was working 100 hours a week,” Mangoli says, remembering the early days in 1983. “It was absolutely tough.” Eventually, the business improved and in 1990, he sold it. Three years ago, after the new owners let the business falter, Mangoli bought it back from them.

“I treated it like a baby for those seven years,” he says. “I had built it from scratch, and even though I made money by selling it, I still missed it. That’s another reason I bought it back.”

Mangoli’s plight, of course, typifies that of many small businesses that suddenly find a giant in their midst. “This wasn’t my worst nightmare, but the thought did occur in my mind that someday it might happen,” he says.

Specifically El Pollo? “Specifically El Pollo Loco, because it’s the same concept,” Mangoli says. “If it had been Kentucky Fried Chicken, maybe I wouldn’t worry about it that much, but El Pollo has the same kind of food I do.”

Market researcher Sandelman said an established place like Mangoli’s won’t automatically go under when a popular chain moves nearby. Mangoli is hoping the downturn coinciding with El Pollo Loco’s arrival is just that.

Since he first heard the El Pollo rumblings a year ago, I asked if his life had been miserable. “Because I believe in myself, I don’t let El Pollo ruin my life or even come close to ruining my life,” he says, smiling. “They could maybe ruin my business, but I believe in myself enough that I could get into something else and be successful.”

I met Mangoli just this week, but already I’m hoping it doesn’t come to that. I like a place where the mailman hands the mail to the shop owner who says, as Mangoli did the day I was there, “Thanks, Greg.”

Can you survive El Pollo? I ask. “The way it’s going, if it continues to go like this, I have my doubts,” he says.

Are you angry? “Free enterprise,” he says. “This is a free country. I put myself in their shoes. Would I do the same thing? Yes, I would. Am I angry with them? No, I’m not. It’s strictly business. I don’t expect them to feel sorry for me as a small businessman. If I were in their shoes, I wouldn’t feel sorry for someone like me.”

He will concentrate more on catering and he’s making overtures to schools. Regulars swear by his food and his personality. Things may still work out.

Then again . . . “To compete with them, I have to have a drive-thru,” he says. “I have to have commercials on TV. I can’t compete with them, obviously. What they can do, I cannot do.”

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Dana Parsons’ column appears Wednesday, Friday and Sunday. Readers may reach Parsons by calling (714) 966-7821 or by writing to him at the Times Orange County Edition, 1375 Sunflower Ave., Costa Mesa, CA 92626, or by e-mail to dana.parsons@latimes.com