The fast food industry is one of the biggest industries in the world, with many big players all around the world.
Popeyes is one of those big brands that operates in hundreds of locations with thousands of stores.
Because of this big reach, they are a good business to own if you are looking to own a franchise business.
However, choosing a brand among many other fast food chain options might be hard, and you might not be sure.
You are in the right place because this article is here to help you with that. We will discuss Popeyes’ franchise business and the details surrounding it.
About Popeyes
Popeyes is an American multinational fast food chain restaurant. Their special focus is chicken, offering mild and spicy flavored chicken dishes.
In addition to the chicken, they also offer some seafood like shrimp. They are headquartered in Miami and have been in the business for over fifty decades.
They now have over 4,000 locations worldwide, including locations in 40 states in the United States and over 30 countries globally.
Popeyes prides itself on offering a unique and authentic Southern-style cooking experience that sets it apart from other fast-food chains.
Their food is made with high-quality ingredients and is prepared fresh daily.
Popeyes also places a strong emphasis on customer service, ensuring that each customer has a positive experience on every visit.
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Popeyes History
Popeyes’ foundation goes back to 1972 in Arabi, Louisiana, by Al Copeland.
He was a New Orleans entrepreneur who started out selling chicken at a local donut shop. Al’s first try at opening his restaurant was under the name “Chicken on the Run.”
He first began serving his own unique blend of spicy fried chicken there, but it soon failed. But then he reponed it again with a different name, this time with “Popeyes Mighty Good Chicken.”
This struck, and he quickly expanded. He changed the company’s name again in 1975, which resembles its current name, “Popeyes Famous Fried Chicken.”
Later on, in 1976, he started franchising in Louisiana, and the success hit so quickly that the company opened its 500th restaurant in 1985.
In the 1990s, due to bankruptcy problems, the company changed hands a couple of times, including its recipes and seasonings.
Now Popeyes’ parent company is Restaurant Brands International, and they bought it in 2017.
Now, the company boasts over 4,000 locations across the globe with over $500 million in annual revenue. They recently made plans public to further expand their franchise business with 35 new locations.
Popeyes Franchise Model
| Initial Investment | $235,000-$3.5 million |
| Franchise | YES |
| Franchising Since | 1976 |
| Franchise-Fee | $50,000 |
| Royalty-Fee | 5% |
| Liquidity | $500,000 |
| Estimated Outlets | 4,100 |
How Much Does It Cost To Open A Popeyes Franchise?
The initial expected investment for a Popeyes franchise location is between $235,000 and $3.5 million.
The reason for this big gap in the expected investment is mostly due to the location and the building.
If you are going to own the location or the branch is going to be in an expensive place, the rent or the mortgage will be more expensive.
In addition to it, this initial investment includes the franchise fee, which is $50,000, and other operational costs.
These costs could be equipment, employees, marketing materials, and other similar things.
Once you open the franchise and pay the expected investment, you must also pay a 5% royalty fee to the brand each month from gross sales.
Popeyes Franchise Requirements
What Popeyes requires in prospective franchisees is mostly financial. Personal requirements are not a must all the time.
You need to have a net worth of $1 million per restaurant you want to own.
In addition, you also need to have liquid assets worth $500,000, again per restaurant. These are the most vital ones to get approved.
On the personal side, Popeyes favors those with experience in the restaurant industry. However, this is not a dealbreaker, and you can still get approved without it.
The idea is to have general business experience, mostly in leadership or management, and the ability to communicate clearly with Popeyes.
Popeyes Profit & Revenue
Popeyes’ latest reports which are for 2022, show that Popeyes had a total revenue of $6.5 billion.
Compared to 2021, which was only $5.7 billion, this is a considerable increase for the company’s financial health.
Out of the $6.5 billion total revenue, the company’s net income was $1.4 billion in 2022. Their operating margin is extremely high, about 20%.
Even though their total revenue increased by a high margin, their revenue didn’t increase as much. Popeyes had a total net income of $1.2 billion in 2021, compared to $1.4 billion in 2022.
In addition to these numbers, Popeyes has a total net debt of $12.2 billion and a free cash flow of $1.3 billion.
Their debt is almost double their total net debt, which is not a happy outlook for the investors and potential franchisees.
Popeyes Franchise Training and Support
Popeyes have experts on their team that give you extensive training to prepare you as a franchise owner.
This training includes everything from the management to the development of your franchise. It gives you everything to successfully start and run your business.
This training comes in different pieces, both in the classroom and on-the-job training. You must talk to Popeyes to learn more about the specifics of these.
Popeyes also provides ongoing support to make your daily operations easier and faster.
This support includes giving you access to proprietary software, marketing materials, and other similar things.
You get this support continuously all the time as long as your branch is operational.
Popeyes Franchise Terms of Agreement and Renewal
The initial term of the agreement you will have with Popeyes will be for 20 years.
This means that your agreement with Popeyes will give you the rights to the name for 20 years in the first step. After the agreement is over, you can have the option to renew it.
You have the option to renew your agreement for an additional 10-year period once the initial agreement is over.
You have to give notice to the franchisor beforehand to renew your agreement.
You also need to satisfy all the necessary compliances with the franchisor, and they need to be happy with you.
Popeyes Franchise Obligations and Restrictions
As the franchisee, you are restricted to buying or leasing items from the franchisor itself or from approved suppliers of the franchisor.
You might also be restricted from operating another business during the entire term of your franchise with Popeyes.
You are restricted to using the space of the franchise solely for Popeyes’ business and nothing else.
Also, a managing director of the store, either you or someone you designate, has to be present in the store’s daily operations.
This managing director must have at least a 5% stake in the business, and the franchisor must approve this managing director.
Popeyes Franchise Financial Assistance
Popeyes don’t offer direct financing to their franchisees. This means that you will have to go to other sources to secure financing for your branch.
The required financial assistance could come in as an SBA loan or traditional bank loan, both with set interest rates.
You can secure these loans easier because you are a franchisee and not a new business owner.
The contents of the loan could vary depending on your needs. There are specific loans that only cover the equipment cost, but there are also other types of loans that cover all the necessary investments. It depends on how much you need and what your situation is.
Popeyes Comparison
| Company | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| KFC | $22,500 | 4-5% | $1.8 million-$3.7 million |
| Chick-Fil-A | $10,000 | 15% | $582,000-$2 million |
| Popeyes | $50,000 | 5% | $235,000-$3.5 million |
Conclusion
It is no secret that Popeyes is a massive company with thousands of stores all across the world.
You have the option to take a piece of this revenue by opting for one of their franchise branches and applying for it.
They require some financial background and management experience, no matter the industry.
Once you are approved, they provide you with all the necessary training, but they do not help you at all with finding the necessary financing to open the store.
With $6.5 billion in total revenue last year, it’s obvious that they are a good choice, and you can find your own loan through traditional methods.
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Frequently asked questions
Who is the CEO of Popeyes?
Joshua Kobza is the CEO of Restaurant Brands International Inc., and he is automatically in charge of all the companies they manage, including Popeyes.
Is Popeyes the biggest fast-food franchise chain?
No, there are bigger fast-food franchise chains out there, but their profit might not be as high as Popeyes. It mostly depends on the location and the size of the store.
How much does it cost to open a Popeyes franchise?
In initial investment, you are expected to spend anywhere between $235,000-$3.5 million.
It mostly depends on where you are opening the store and what the requirements are in terms of equipment, employees, and so on.
Sources
https://en.wikipedia.org/wiki/Popeyes
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.