fbpx
Submit
Feedback

Popeyes Franchise Cost Detailed (2022)

Written by: Dylan Tymkiw
Last Updated: January 24, 2022
Free Download our Exclusive Food and Beverage Industry Guide
Download Now
popeyes franchise

Popeyes makes over a million in sales 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.

How Much is a Popeyes Franchise?

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.

Popeyes Franchise Cost

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.

Additional Cost breakdown:

Type of Expenditure Free Standing Estimated Range In-Line Estimated Range Method of Payment When Due To Whom Payment is to be Made
Low High Low High
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 Initial Investment $423,800 $3,545,800 $383,500 $1,362,800 (Does not include real estate)

popeyes kitchen

Popeyes Ongoing Costs and Fees:

Royalty Fee: 5% Weekly Gross Sales

Advertising Contribution: 4% Weekly Gross Sales

These fees are standard for most franchises in the food and beverage industry.

What do you need to open a Popeyes Franchise?

Popeyes Louisiana Kitchen is continuously looking for passionate operators that are committed to providing an exceptional guest experience.

 

The requirements for a Popeyes franchise include:

  • A net worth of at least $1,000,000
  • Liquid capital of at least $500,000
  • Previous restaurant experience

 

The approval process includes:

  • Application submission
  • Discovery call
  • Application review
  • Leadership Interview

How much do Popeyes Franchise owners make?

Consolidated Units Company Owned Units Franchised Units
Annual Sales Levels Percentage Count Percentage Count Percentage Count
$2,500+ 1.7% 2 0.0% 0 1.7% 2
$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
<$749  4.1% 5  0.0% 0 4.1% 5
Total 100.0% 121  0,0% 0 100.0% 121
Consolidated Company Owned Franchised
Arithmetic Average $1,377,253 $0 $1,377,253
%/# of Restaurants that Met or Exceeded Average 43.0% 52 0.0% 0
Arithmetic Median $1,321,385 $0
High $3,644,618 $0
Low $518,830 $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 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.

franchise advisor

Is Popeyes Franchise Profit Worth the Franchise Cost?

After five years in the business, when you go to sell your franchise based on the median multiple of .34 and net sales of 2019 of $1,321,385 it would sell for about $449,270. This is only 22% of the midpoint initial investment.

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. 

Popeyes Louisiana Kitchen Income Statement:

2020 2019 2018
Revenues:
Sales $2,013 $2,362 $2,355
Franchise and property revenues 2,955 3,241 3,002
Total revenues 4,968 5,603 5,357
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
Interest 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 750 1,111 1,144
Net income attributable to noncontrolling interest (Note 12) 264 468 532
Net income attributable to common shareholders $486 $643 $612
Earnings per common share:
Basic $1.61 $2.40 $2.46
Diluted $1.60 $2.37 $2.42
Weighted average shares outstanding:
Bassic 302 268 249
Diluted 468 469 473

Popeyes Louisiana Kitchen is a profitable 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.

popeyes

How Many Popeyes Units Have Opened and Closed?

Outlet Type Year Outlet at the Start Of the Year Outlet at the End Of the Year Net Change
Franchised 2018 2,167 2,327 +160
2019 2,327 2,458 +131
2020 2,458 2,593 +135
Company-Owned 2018 53 41 -12
2019 41 0
2020 41 0
Total Outlets 2018 2,220 2,368 +148
2019 2,368 2,499 +131
2020 2,499 2,634 +135

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. 

Conclusion

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 initial investment 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. 

franchise advisor

Latest Articles

Raising Cane’s: New business horizons promise big profits this 2022

Raising Cane’s: New business horizons promise big profits this 2022

Outback Steakhouse: A Profitable Business Opportunity in 2022

Outback Steakhouse: A Profitable Business Opportunity in 2022

Denny’s Franchise: Not the best business model for Covid times

Denny’s Franchise: Not the best business model for Covid times

Snap On Franchise Cost & Failure Rate (2022 Review)

Snap On Franchise Cost & Failure Rate (2022 Review)

Molly Maid Franchise: The Exclusive Interview You Must Read in 2022

Molly Maid Franchise: The Exclusive Interview You Must Read in 2022

Submit Feedback