Popeyes makes over a million in The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. per year and this number continues to grow!
Popeyes Louisiana Kitchen is a quick-service restaurant specializing in the sale of fried chicken, seafood, etc. The company was founded in Minnesota in 1992 under the name America’s Favorite Chicken and did not get the name of Popeyes Louisiana Kitchen until 2014. In 2017 Popeyes was acquired by Orange Inc, which then merged into the company.
Popeyes authentic “Louisiana Style” menu has made it famous all around the country. Currently, there are more than 2,600 Popeyes outlets around the country and that number is only getting bigger.
Sami Siddiqui is the President of Popeyes Louisiana Kitchen, which is currently owned by Restaurant Brands International.
Competitors of Popeyes include other franchises in the fast-food industry such as McDonald’s, Subway, KFC, Burger King, and other Popeyes nearby. Nearby restaurants with healthier food options are also competitors.
We will analyze if the initial cost is worth the potential returns.
The standard fee for a Popeyes franchise is $50,000. The upfront fee must be paid before opening the restaurant. A fee of the same amount is due for every additional unit you may open.
The estimated total investment needed for beginning operations is between $423,800 and $3,545,800. Popeyes also lets you open delivery-only least restaurants, for which the investment is as low as $109,500 – $749,300 but we will focus on the traditional franchise.
|Type of Expenditure||Free Standing Estimated Range||In-Line Estimated Range||Method of Payment||When Due||To Whom Payment is to be Made|
|Initial Franchise Fee||$50,000||$50,000||$50,000||$50,000||Lump sum||Prior to Opening for Business||Popeyes|
|Real Estate||Variable||Variable||Variable||Variable||Monthly||As arranged||Lessors/Vendors|
|Soft Cost||$7,800||$400,000||$8,000||$85,000||As arranged||As arranged||Service providers, architects or engineers, fovernment agencies|
|Site Work||$40,000||$650,000||Typically not required||Typically not required||As arranged||As arranged||General contractors and suppliers|
|Building||$100,000||$1,600,000||$100,000||$627,000||As arranged||As arranged||General contractors and suppliers|
|FF&E, Signane and Technology||$165,000||$700,000||$165,000||$500,000||Lump sum||As orderer||Vendors|
|Initial Training||$17,200||$24,200||$17,200||$24,200||Lump sum||As incurred||Employees/Vendors|
|Opening Supplies||$11,500||$23,000||$11,500||$23,000||As arranged||As incurred||Suppliers|
|Insurance||$9,000||$18,000||$9,000||$18,000||As arranged||As ordered||Insurance company/broker|
|Utility Deposits||$3,000||$50,000||$2,500||$5,000||Lump sum||Per lease or utility company’s requirements||Utility companies/Lessors|
|Business Licenses||$300||$600||$300||$600||Lump sum||Before opening||Government agencies|
|Additional Funds – 3 months||$20,000||$30,000||$20,000||$30,000||As arranged||As needed||Employees/Suppliers|
|Total Estimated The amount of funds necessary to begin operations of a business or franchise including the first three months of operation.||$423,800||$3,545,800||$383,500||$1,362,800||(Does not include real estate)|
Royalty Fee: 5% Weekly Gross The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue.
Advertising Contribution: 4% Weekly Gross Sales
These fees are standard for most franchises in the food and beverage industry.
Popeyes Louisiana Kitchen is continuously looking for passionate operators that are committed to providing an exceptional guest experience.
|Consolidated Units||Company Owned Units||Franchised Units|
|Annual The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. Levels||Percentage||Count||Percentage||Count||Percentage||Count|
|$2,250 – $2,499||2.5%||3||0.0%||0||2.5%||3|
|$2,000 – $2,249||5.8%||7||0.0%||0||5.8%||7|
|$1,750 – $1,999||7.4%||9||0.0%||0||7.4%||9|
|$1,500 – $1,749||13.2%||16||0.0%||0||13.2%||16|
|$1,250 – $1,499||27.3%||33||0.0%||0||27.3%||33|
|$750 – $1,249||38.0%||46||0.0%||0||38.0%||46|
|%/# of Restaurants that Met or Exceeded Average||43.0%||52||0.0%||0|
|Number of Units||121||0||121|
|Upper Range Average $1.500+||$1,909,770||$0||$1,909,770|
|%/# of Restaurants that Met or Exceeded Average||35.1%||13||0.0%||0||35.1%||13|
|Upper Range Median $1.500+||$1,776,845||$0||$1,776,845|
2019 Popeyes Median Franchise Sales: $1,321,385
The highest-earning franchise made around $3.6 million in revenue whereas the lowest-earning franchise made $518,830. These numbers indicate that potential Total earnings received by a business based on the U.S. Income Tax Return. The financial numbers of these earnings depend on the type of business, but can include income, guaranteed payments, compensation, interest, depreciation, elective deferrals, and contributions.For further details on how to calculate earnings… can vary significantly and it depends on factors such as locations and how well the business is run.
1- Based on a midpoint investment of $1,984,800 with estimated profits of $132,138 at a 10% profit margin it would take about 15 years to recoup your investment.
2- Based on a midpoint investment of $1,984,800 with estimated profits of $198,207 at a 15% profit margin it would take about 10 years to recoup your investment.
3- Based on a midpoint investment of $1,984,800 with estimated profits of $264,277 at a 20% profit margin it would take about 7 years to recoup your investment.
After five years in the business, when you go to sell your franchise based on the median multiple of .34 and net The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. of 2019 of $1,321,385 it would sell for about $449,270. This is only 22% of the midpoint The amount of funds necessary to begin operations of a business or franchise including the first three months of operation..
The median multiple franchises selling more than $5 million is .86. If you had 10 Popeyes franchises (about $13,213,850 in sales), assuming that every location has the same initial investment, selling would earn you around 57% of your initial investment.
The key to making your money back with a Popeyes franchise is opening multiple locations. Also, you can profit from the development of your franchise real estate and then sell the real estate and building.
|The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue.||$2,013||$2,362||$2,355|
|Franchise and property revenues||2,955||3,241||3,002|
|Operating costs and expenses:|
|Cost of sales||1,610||1,813||1,818|
|Franchise and property expenses||528||540||422|
|Selling, general and administrative expenses||1,264||1,264||1,264|
|(Income) loss from equity method investments||39||(11)||(22)|
|Other operating expenses (income), net||105||(10)||8|
|Total operating costs and expenses||3,546||3,596||3,440|
|Income from operations||1,422||2,007||1,917|
|A payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off… expense, net||508||532||535|
|Loss on early extinguishment of debt||98||23||–|
|Income before income taxes||816||1,452||1,382|
|Income tax expense||66||341||238|
|Net income attributable to noncontrolling interest (Note 12)||264||468||532|
|Net income attributable to common shareholders||$486||$643||$612|
|Total earnings received by a business based on the U.S. Income Tax Return. The financial numbers of these earnings depend on the type of business, but can include income, guaranteed payments, compensation, interest, depreciation, elective deferrals, and contributions.For further details on how to calculate earnings… per common share:|
|Weighted average shares outstanding:|
Popeyes Louisiana Kitchen is a When the earnings in a given period of time is more than the expenses in a business. business for the franchisor with income that is very close to a billion dollars. Popeyes saw some growth between 2018 and 2019, but that growth did not continue throughout 2020 most likely due to the COVID-19 pandemic. The decline in net income for 2020 was 24% which is a considerable number and you should keep in mind that the franchisor may be affected by future crises.
|Outlet Type||Year||Outlet at the Start Of the Year||Outlet at the End Of the Year||Net Change|
The number of franchises has been increasing year after year at a rate of 100 units and it did not slow down in 2020! This could be a great indicator that franchisees are doing well even amid the pandemic, which gives reassurance that COVID will not come back and destroy your investment.
Popeyes is a growing restaurant chain in the fast-food industry in America. People love fast food and will always consume it. However, the recent rise of healthier food options will have an impact on restaurants like Popeyes so keep that in mind.
If you open a Popeyes franchise you can recoup your investment in 7 to 15 years depending on profitability, which is not awesome but still comparable to other fast-food franchises. On top of that, when you go and sell your franchise it will most likely not make your The amount of funds necessary to begin operations of a business or franchise including the first three months of operation. back if you just one location. However, if you develop 5+ locations you can make a healthy profit margin.
A positive aspect of Popeyes is that even though the growth of the company stagnated, franchisees seem to be doing goodwelln after the pandemic started, with more than 100 additional units being opened every year. This means that you have some reassurance that another pandemic will probably not impact your franchise too badly.
Our suggestion is to think a lot about the location of your Popeyes restaurant and to speak to at least one franchise owner before opening a franchise.
If you think Popeyes is the right franchise for you, or you would like to explore other franchise opportunities, check out our listing page on the Vetted Biz website for thousands of franchises available for your investment.