Popeyes Louisiana Kitchen, Inc. is the franchisor. The franchisor is an indirect subsidiary of Restaurant Brands International Limited Partnership. Popeyes restaurants are quick service restaurants offering a limited menu of lunch and dinner products, and in certain restaurants approved by the franchisor, breakfast products. Popeyes distinguishes itself with a unique “Louisiana” style menu that features spicy chicken, chicken tenders, biscuits, fried shrimp and other seafood, red beans and rice and other quick-service menu items. Popeyes restaurants are located in many different communities and different locations within communities including free-standing buildings, store-front locations, and mall locations, in urban and suburban locations. Popeyes restaurants may feature a walk-in format, drive-thru, sit-down, takeout, delivery, or some combination of these types.
Training Overview: Certain of the franchisee’s management employees must complete (to the franchisor’s satisfaction) the Popeyes Training Program (PTP) for their applicable management role at the franchised restaurant. If the franchised restaurant is the franchisee’s first Popeyes restaurant, then before the franchisee opens or takes possession of the restaurant, a minimum of five of the designated management employees (the franchisor will decide the final number), including the managing director, must complete (to the franchisor’s satisfaction) PTP for their applicable management role at the restaurant. PTP can last as long as six to ten weeks, the first two to four weeks of which consist of an orientation and team member station training until the trainee meets the franchisor’s proficiency standards. The next four to six weeks will cover leadership training as well as training modules for (as applicable) a restaurant general manager, assistant restaurant general manager, and shift manager. The remaining modules of PTP can last as long as 20 to 50 hours, in the aggregate. Periodically, the franchisor also may make available to franchisees or their employees additional training programs that the franchisor, in its discretion, choose to conduct. Attendance at these training programs may be mandatory.
Territory Granted: When franchisees sign a Franchise Agreement for a franchised restaurant that is not an alternative venue, franchisees will be granted a geographic area within which the franchisor will not open, nor license anyone other than the franchisee to open, a Popeyes restaurant during the term of the Franchise Agreement. The protected area will consist of an area equal to the lesser of: (1) a 1-mile radius around the franchised restaurant; or (2) an area surrounding the franchised restaurant encompassing a population (residential and workplace combined) of 50,000 people. The limited exclusivity granted in the protected area does not apply to: (a) existing Popeyes restaurants, (b) any closed Popeyes restaurants that may re-open within three years from the closing date of such restaurant; and (c) restaurants for which Franchise Agreements were previously granted. The franchisor has the right periodically to reduce or modify the protected area to reflect population shifts. However, if less than a one-mile radius, the protected area always will include a population of at least 50,000 people.
Obligations and Restrictions: Franchisees must designate and retain an individual to serve as the managing director of the franchised restaurant. If franchisees are an individual that owns the franchise, the franchisor recommends (but does not require) that they be the managing director. The managing director must be approved by the franchisor and must have at least a 10% legal or beneficial ownership interest in the franchise or the right to receive 10% or more of the operating profits of the franchised restaurant. The managing director must have full control over the day-to-day operations of the franchised restaurant and any other Popeyes restaurants owned by the franchisee located in the same geographic area. The franchised restaurant must at all times be under the direct, on-premises supervision of a Popeyes Certified Manager. Franchisees must use the franchised restaurant solely for the operation of a Popeyes restaurant and must keep the franchised restaurant open and in normal operation for the hours and days as specified in the manual or otherwise in writing. Franchisees must operate the franchised restaurant in strict conformity with the methods, standards and specifications as prescribed in the manual or otherwise in writing. Franchisees must offer for sale and sell at the franchised restaurant all and only those products and services as are expressly authorized by the franchisor in the manual or otherwise in writing. Franchisees may offer products and menu items for sale at whatever price they want except with respect to certain products on the menu designated by the franchisor from time to time, which are subject to a maximum price it sets.
Term of Agreement and Renewal: The length of the initial franchise term is 20 years from the date of commencement of operation of the franchised restaurant. One renewal term of 10 years, subject to contractual requirements is available, as well as an option to purchase up to one additional 10 year “Supplemental Renewal Term.” There is no renewal option if franchisees operate a delivery restaurant.
Financial Assistance: The franchisor does not generally offer any direct or indirect financing to franchisees. Franchisees does not guarantee a franchisee’s note, lease or obligation. The franchisor and its affiliates have the right to sell, assign or discount to a third party all or part of any amounts franchisees may owe to the franchisor or to its affiliates. If the franchisor owns or leases the land or the land and building of the franchised restaurant, the franchisor may lease or sublease the location to the franchisee.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Franchise Fee | $2,500 | $50,000 |
| Real Estate and Improvements | Variable | |
| Soft Costs | $1,000 | $400,000 |
| Site Work | $2,500 | $800,000 |
| Building | $0 | $1,600,000 |
| FF&E Signage and Technology | $75,000 | $700,000 |
| Initial Training | $17,200 | $24,200 |
| Opening Supplies | $3,000 | $23,000 |
| Insurance | $3,000 | $18,000 |
| Utility Deposits | $2,500 | $50,000 |
| Business licenses | $300 | $600 |
| Additional Funds (3 months) | $2,500 | $30,000 |
| ESTIMATED TOTAL* | $109,500 | $3,695,800 |
*The estimated initial investment range covers from a delivery-only restaurant up to a free standing location. The range doesn’t include real estate.
| Type of Fee | Amount |
|---|---|
| Royalty | 5% of gross sales. |
| Advertising Contribution | 4% of gross sales. |
| Advertising Co-op | Currently, 0.5% to 1.75% of gross sales as established by local advertising co-op. |
| Additional Ordering System / Additional Digital System (Consumer Ordering Technology Fee) | Fixed fee of $200 per restaurant per month, plus 1% of digital sales, with an annual maximum per calendar year of $6,500 per restaurant. |
| POP I.T. Fee | $1,010 per year, per restaurant (under rPOS). But costs vary based on point of sale platform used. |
| Rent (where property is leased from the franchisor) | Varies. |
| Audit | Cost of audit. |
| Costs and Attorneys’ Fees | Franchisor’s costs and expenses. |
| Guest Recovery Fee | Varies. |
| Indemnity | The losses and expenses the franchisor incurs. |
| Insurance | Cost of obtaining coverage plus interest and a reasonable administrative fee that the franchisor will set. |
| Interest on Overdue Payments | 1.5% per month or the maximum rate permitted by law, whichever is less. |
| Interest on Understated Sales | 1.5% per month or the maximum rate permitted by law, whichever is less. |
| Late Charges/Interest | Lesser of 18% or maximum rate allowed by law. |
| Returned Payment Fee | $35 per returned payment. |
| Product Testing, Inspections and Approval | Costs for testing new products and inspecting new suppliers. |
| Third-Party Food Safety and Brand Standards Inspections | Costs for conducting third-party inspections of restaurant for compliance with food safety and brand standards. |
| Renewal | The then-current, standard initial franchise fee, prorated for the renewal term. |
| Extension Fee | The then-current initial franchise fee, prorated for the extended term. |
| Supplemental Term Option | 50% of the then-current, standard initial franchise fee. |
| Securities Offering Review Fee | $5,000 or a greater amount, if necessary, to reimburse the franchisor for its out-of-pocket costs and expenses in connection with reviewing the proposed securities offering. |
| Transfer Fee | $1,500 – $7,500 depending upon the transfer. |
| Impact Study | $3,500 per study. |
| Background Check Fee | $210 – $15,000 |
| Training Platform Maintenance Fee | $50 per month. |
| Restaurant Logs and Routines | $15 per month. |
| Miscellaneous Reimbursements, Purchases, Services | Varies based upon the item. |
| Gift Card Services | Transaction Fee: Estimated 1.8% of any redeemed sales, may increase or decrease no more than one time per year, the minimum and maximum. Transaction Fee will be 0.5% and 3.5% of redeemed sales, respectively. |
| Cure Fee | TRA: Then current initial franchise fee. MTRA: Balance of the initial franchise fee multiplied by the number of restaurants not developed under the schedule. |
| Site Re-Approval Fee | $5,000 |
| PLK Foundation | $1,000 per restaurant per year. |
| Brand Damage Fee | Amount of the next installment of initial franchise fees the franchisee as required to pay to the franchisor under the Area Development Agreement before the date of termination. |
| Rescheduling Fee | Amount equal to the franchisor’s out of pocket expenses incurred to reschedule opening of restaurant. |
| Repair and Maintenance Fee | Amount equal to the franchisor’s costs and expenses incurred to complete any repair and maintenance, plus service charge of 15%. |
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