Franchise Costs: Detailed Estimates of Popeyes Louisiana Kitchen Franchise Costs (2018 FDD)

Updated May 23, 2018.

Detailed Estimates of Popeyes Louisiana Kitchen Franchise Costs Based on Item 7 (Estimated Initial Investment) of Popeyes’ 2018 Franchise Disclosure Document

For Free Standing Restaurants

• Free Standing Restaurants include Restaurants located in single purpose, single tenant buildings. Free Standing Restaurants may also include “Build to Suit” projects, which can substantially lower your initial investment costs.

• In a typical Build to Suit scenario, the landlord will deliver a complete building ready for you to customize the interior.

1.  Franchise Fee:  $50,000

• You may be eligible to pay a reduced Franchise Fee of $27,500 if you qualify for the franchisor’s Veterans Development Incentive Program or its Women and Minorities Development Incentive Program.

2.  Real Estate:  Variable

• The franchisor cannot estimate your initial investment for acquiring or leasing real estate for the Restaurant; however, the following factors will bear on these costs.

• Restaurants range in size from 1,600 to 3,500 square feet.

• Free-Standing Restaurants in suburban locations will require from 28,000 to 38,000 square feet of land for the Restaurant and adequate parking facilities.

• Security deposits should not exceed an average of two months’ rent.

3.  Soft Costs:  $7,800 to $265,000

• The estimate is for legal, accounting, administrative, permitting, architectural, design, traffic studies, demographic studies, brokerage, and miscellaneous other professional fees that you may incur before you open for business, including (among other things) to assist you in reviewing the Franchise Agreement.

4.  Site Work:  $40,000 $650,000

• This estimate covers site improvement costs such as sewer, electrical, water, paving, striping, concrete, landscaping, grading and excavation, and site accessories.

5.  Building:  $100,000 to $1,025,000

• This estimate includes the costs of constructing improvements, or “building out” the premises at which you will operate your Restaurant. Among other things, you will need to arrange for proper wiring and plumbing, floor covering, wall covering, partitions, heat, air conditioning, lighting, installation, storefront modifications, painting, cabinetry, bathroom facilities, etc., as outlined in architectural Mechanical, Electrical, and Plumbing (MEP) drawings.

• You will need to hire a qualified licensed general contractor. Free Standing Restaurants are ordinarily of masonry or frame construction.

6.  FF&E, Signage, and Technology:  $165,000 to $485,000

• You must purchase certain items of furniture, fixtures, equipment, signage, smallwares, and a technology package (point-of-sale and back-of-house computer systems and firewall) for your Restaurant. The Manual contains a complete list of the needed items. The cost of equipment and signage varies depending on the size and location of the Restaurant.

7.  Initial Training:  $17,200 to $24,200

• In connection with the initial training, you will need to arrange and pay for transportation, lodging, food, proper uniforms, and incidental expenses for you and your designated management employees. You must also pay the salaries and benefits of your designated management employees.

• The franchisor may require that you send a certain minimum number of employees that the franchisor determines to training.

• In addition, if PTP (as more particularly described in Item 11) is completed at a Popeyes Restaurant that is owned by another Popeyes franchisee, you will have to reimburse that franchisee for certain training costs as described in Item 11.

8.  Opening Supplies:  $11,500 to $23,000

• The franchisor estimates that this amount will be sufficient to cover a supply of food, paper products, uniforms, and required training materials for the first one to two weeks of Restaurant operations.

9.  Insurance:  $9,000 to $18,000

• This item includes amounts that must be paid before the opening of your Restaurant and may not include amounts payable after the Restaurant opens.

• Required insurance includes:  general liability, employers’ liability, workers’ compensation, auto liability (if you own, hire, or lease automobiles for use in your business), and property insurance. Your costs will vary according to the risks associated with your business and your location. The cost of workers’ compensation insurance will vary according to the number of employees of the Restaurant and the requirements of state law.

10.  Utility Deposits:  $3,000 to $50,000

• You may need to provide deposits for utilities. The amount of these deposits and utility costs will vary depending upon the location of the Restaurant and the practices of the lessor and the utility companies.

11.  Business Licenses:  $300 to $600

• Local, municipal, county, and state regulations vary on what licenses and permits are required to operate a Restaurant. For example, you may need city and county occupational licenses and a city food handlers’ license. These fees are paid to government authorities before commencing business.

12.  Additional Funds – 3 Months:  $20,000 to $30,000

• You will need capital to support ongoing expenses, such as payroll, uniforms, supplies, and miscellaneous expenses. The franchisor estimates that this amount will be sufficient to cover ongoing expenses for 3 months. This is only an estimate, however, and there is no assurance that additional working capital will not be necessary whether during this initial phase or later.

13.  Total Investment:  $423,800 to $2,620,800

• This is the franchisor’s best estimate of your total investment, excluding the cost of real estate, assuming that you will establish only one Restaurant.

• The franchisor relied upon the many years of experience of its executives, its experience in developing company-operated Restaurants, and reports from its franchisees in preparing these figures.

For In-Line Restaurants

• The total estimated initial investment necessary to begin operation of an in-line Popeyes Restaurant, excluding the cost of real estate, ranges from $383,500 to $1,254,800.

• In-Line Restaurants include Restaurants located in or at “strip-style” retail shopping centers, premises with convenience stores, travel plazas (or similar locations that sell gasoline), shopping malls, and other food court locations.