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Popeyes Louisiana Kitchen Franchise Cost & Fees

Date of Incorporation: 1972

Franchising Since: 1976

Headquarters: Atlanta, Georgia

 

Business Description: Popeyes Louisiana Kitchen, Inc. is the franchisor. 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.

 

Franchise Offer: Franchisees will operate a quick-service restaurant specializing in the sale of fried chicken, seafood and other quick service food under the name “Popeyes Louisiana Kitchen.”

 

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee the franchisee’s notes, leases or other obligations.

 

Training and Assistance: Franchisees must complete, to the franchisor’s satisfaction, the Popeyes New Franchisee Orientation Program before opening or taking possession of their first Restaurant. Before opening the Restaurant, a minimum of 4 designated management employees (the franchisor will decide the final number), including the Operating Principal for the Restaurant, must attend and complete, to the franchisor’s satisfaction, the Popeyes Management Certification (PMC) Program, which consists of online training and in-restaurant operations training at a facility designated by the franchisor. The PMC Program includes production and service training, production management, service management and shift management modules. The PMC Program can last as long as 6 to 10 weeks. 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: Franchisees will be granted a geographic area within which we 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 Restaurant; or (2) an area surrounding the Restaurant encompassing a population (residential and/or daytime/commercial) of 50,000 people. The limited exclusivity granted in the Protected Area does not apply to: (a) enclosed shopping malls; (b) existing Restaurants, closed Restaurants that may re-open, and/or Restaurants for which Franchise Agreements were previously granted; or (c) alternative other locations, such as: transportation facilities (including airports, train stations, bus stations, etc.), toll road plazas and other travel plazas on major thoroughfares, educational facilities (including schools, colleges and universities), institutional feeding facilities (including hospitals, hotels or corporate cafeterias), government institutions and facilities, military bases, amusement, recreational and/or theme parks, or casinos, even if those facilities are located in the Protected Area.

 

Term of Agreement and Renewal: The length of the initial franchise term is 20 years from the date of commencement of operation of the Restaurant. One renewal term of 10 years, subject to contractual requirements, and an option to purchase up to 1 additional 10 year “Supplemental Renewal Term” is available.

 

Obligations and Restrictions: If more than one individual or a legal entity such as a corporation, partnership or limited liability company owns the Franchise, the franchisee must designate and retain an individual to serve as the Operating Principal of the Restaurant. The Operating Principal must be approved by Popeyes and must have at least a 5% ownership interest in the franchisee or the right to receive 5% or more of the operating profits of the Restaurant. In addition, the Restaurant must at all times be under the direct, on-premises supervision of a PMC Certified Manager whom the franchisee designates to have primary responsibility for its operation. Franchisees must use the Restaurant solely for the operation of a Popeyes Restaurant and must keep the Restaurant open and in normal operation for the hours and days as specified in the Manual or otherwise in writing. Franchisees must meet and maintain the highest applicable health standard and rating. Franchisees must operate the 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 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.

 

Estimated Number of Units: 2,315

 

Investment Tables:

Initial Investment

Free Standing

Name of Fee Low High
Initial Franchise Fee $35,000 $35,000
Real Estate and Improvements Variable
Equipment, Furniture and Signs $234,000 $280,000
Technology Package, Including POS and BOH Systems $37,000 $52,000
Initial Training $15,000 $22,000
Opening Supplies $10,000 $20,000
Insurance $9,000 $18,000
Utility Deposits $3,000 $50,000
Business licenses $300 $600
Additional Funds (3 months) $20,000 $30,000
ESTIMATED TOTAL INVESTMENT (excluding real estate) $375,800 $520,100

 

In-line

Name of Fee Low High
Initial Franchise Fee $35,000 $35,000
Real Estate and Improvements Variable
Equipment, Furniture and Signs $171,000 $268,000
Technology Package, Including POS and BOH Systems $22,000 $43,000
Initial Training $15,000 $22,000
Opening Supplies $10,000 $20,000
Insurance $9,000 $18,000
Utility Deposits $2,000 $5,000
Business licenses $300 $600
Additional Funds (3 months) $20,000 $30,000
ESTIMATED TOTAL INVESTMENT (excluding real estate) $297,300 $454,100

 

Conversions

Name of Fee Low High
Initial Franchise Fee $35,000 $35,000
Real Estate and Improvements Variable
Equipment, Furniture and Signs $106,000 $281,000
Technology Package, Including POS and BOH Systems $37,000 $42,000
Initial Training $15,000 $22,000
Opening Supplies $10,000 $20,000
Insurance $9,000 $18,000
Utility Deposits $2,500 $50,000
Business licenses $300 $600
Additional Funds (3 months) $20,000 $30,000
ESTIMATED TOTAL INVESTMENT (excluding real estate) $247,300 $464,100

 

Other Fees

Type of Fee Amount
Royalty 5% of gross sales.
Advertising Fund Contribution 4% of gross sales.
Advertising Co-op As established by Local Advertising Co-op (in addition to Advertising Fund Contribution).
Audit Cost of audit.
Costs and Attorneys’ Fees Franchisor’s costs and expenses.
Development Schedule Extension Fee Up to $5,000 for each Development Schedule Extension.
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.
Returned Payment Fee $35 per returned payment.
Plan Revision Fee $1,000 per revision.
Product Testing Cost of testing new products.
Renewal 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.
Site Visit Fee $1,500 per site visit.
Supplemental Term Option 50% of our then current, standard, initial franchise fee.
Trade Secret Products Approximately $3,000 initially; approximately $3,000 per month when in operation.
Transfer $7,500
Impact Study $6,000 per study.

The above information has been taken from the FDD of Popeyes Louisiana Kitchen. Year of FDD: 2014

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