Detailed Information on Popeyes Louisiana Kitchen’s Initial Franchise Fee, Royalty Fee + 34 Other Fees (Items 5 and 6, 2022 FDD)
1. Initial Franchise Fee: $50,000
- Under the Franchise Agreement, you must pay Popeyes a $50,000 franchise fee for a Popeye’s Restaurant (“Initial Franchise Fee”) before opening the Franchised Restaurant. The Initial Franchise Fee is due at the time you sign the Franchise Agreement, is not credited against any other fee, is not payable in installments, and is not refundable.
2. TRA Deposit: $0
- You must sign either a Target Reservation Agreement (“TRA”), a Multiple Target Reservation Agreement (“MTRA), or an Area Development Agreement, based on the number of Franchised Restaurants you commit to develop. You must sign a TRA or an MTRA if you wish to specify “Target Area(s)” to search for potential sites to develop one or more Popeyes Restaurants.
- There is no deposit due when you sign the TRA.
3. MTRA Deposit: $25,000 multiplied by the number of Popeyes Restaurant openings committed
- When you sign the MTRA, you must pay to Popeyes an “MTRA Deposit” determined by multiplying $25,000 by the number of Popeyes Restaurant openings committed.
- When you sign each Franchise Agreement, Popeyes will apply $25,000 from the previously made MTRA Deposit towards the Initial Franchise Fee owed by you for the applicable Popeyes Restaurant until the full amount of all MTRA Deposit is applied.
4. Development Fee: $5,000 to $20,000; unless you and Popeyes otherwise agree, you must also prepay the Initial Franchisee Fees you would pay for each Popeyes Restaurant you commit to develop
- Popeyes occasionally grants Area Development Agreements. The terms are subject to negotiation.
- When you sign your Area Development Agreement, you must pay Popeyes for all costs and expenses incurred by it to source, review, and onboard you, and all other incidental expenses it incurs to prepare your Area Development Agreement. This cost generally ranges from $5,000 to $20,000.
- Unless you and Popeyes otherwise agree, you must also prepay the Initial Franchisee Fees you would pay for each Popeyes Restaurant you commit to develop.
- This amount is paid in installments with the first installment due and payable on the date of the Area Development Agreement. The remaining amount is paid in installments over the term of the Area Development Agreement.
- These agreements are typically granted only to sophisticated, highly experienced franchisees.
5. Royalty: 5% of Gross Sales
- Due Date: Weekly on Gross Sales for the prior week.
- “Gross Sales” means all revenue related to the Restaurant, less sales taxes.
6. Advertising Contribution: 4% of Gross Sales
- Due Date: Weekly on Gross Sales for the prior week.
- Popeyes may reduce or waive the Advertising Contribution for restaurants located in Alternative Venues.
7. Advertising Co-op: currently 0.5% to 1.75% of Gross Sales as established by Local Advertising Co-op
💰How Much Franchise Can You Afford? Use Our Free Financial Calculator
🎯Find GOOD Franchises in Your Target Industries That Are STILL Available in Your Area (Free Tool)
- Due Date: Weekly on Gross Sales for the prior week.
- The exact amount of the contribution to the Co-op will be determined by a vote of its members; when added to the Advertising Contribution, the total will not be less than 4% of Gross Sales.
8. Additional Ordering System/Additional Digital System (Consumer Ordering Technology Fee): 1% of Digital Sales
- Due Date: If incurred, on demand.
- Digital sales include all sales originated from Popeyes’ digital platforms (mobile app, website, kiosk, white label delivery), digital in-restaurant offers, potential new digital channels such as catering and loyalty, as well as sales made by registered online users/guests, digital drive-thru recognition, and others, but exclude sales made via third-party ordering platforms.
9. Rent (where property leased from Popeyes): varies
- Due Date: Base Rent: Payable in advance on the 1st day of each month. Percentage Rent: As agreed.
- Rents charged by Popeyes are net of all taxes, costs, common area maintenance charges, expenses, insurance, and other charges, all of which you must pay in addition to rent.
10. Audit: cost of audit
- Due Date: If incurred, on demand.
- If Popeyes audits you and finds that you understated Gross Sales by 2% or more, you must reimburse it for the cost of the audit.
11. Costs and Attorneys’ Fees: Popeyes’ costs and expenses
- Due Date: Immediately, if incurred.
- Costs and attorneys’ fees are payable if Popeyes terminates the Franchise Agreement because of your default.
12. Guest Recovery Fee: varies
- Due Date: If incurred, on demand.
- You must reimburse Popeyes the costs it has incurred based on the number and type of guest complaints received by the guest relations platform with respect to your Restaurant.
13. Indemnity: the losses and expenses Popeyes incurs
- Due Date: If incurred, on demand.
- You must indemnify and reimburse Popeyes for its costs and any judgment if it is sued for claims relating to the operation of your Restaurant or arising out of any agreement you may have with Popeyes.
- You must also reimburse Popeyes for costs it incurs in enforcing the agreements if you default or if you sue it (unless you are found to be in compliance with the agreements).
14. Insurance: cost of obtaining coverage, plus interest and a reasonable administrative fee that Popeyes will set
- Due Date: If incurred, on demand.
- If you do not obtain or maintain insurance coverage and Popeyes purchases coverage on your behalf, you must reimburse it.
15. Interest on Overdue Payments: 1.5% per month or the maximum rate permitted by law, whichever is less
- Due Date: If payments are more than 7 days overdue, on demand.
- Interest on late payments runs from the date you should have made your payment until the date it is received by Popeyes.
16. Interest on Understated Sales: 1.5% per month or the maximum rate permitted by law, whichever is less
- Due Date: If incurred, on demand.
- Interest on underreported sales runs from the date you should have made your payment until the date you pay Popeyes.
17. Late Charges/Interest: lesser of 18% or maximum rate allowed by law
- Due Date: If incurred, on demand.
- Payments under the lease not paid timely are subject to a late charge/interest.
18. Returned Payment Fee: $35 per returned payment
- Due Date: If incurred, on demand.
- Any payment you make or that Popeyes drafts in accordance with its policies and/or your agreements that is returned for insufficient funds or otherwise not honored by your bank will be assessed a fee (or the maximum fee allowable by law).
19. Product Testing, Inspections, and Approval: costs for testing new products and inspecting new suppliers
- Due Date: If incurred, on demand.
- If you request approval to purchase ingredients, supplies, and goods from suppliers that Popeyes has not approved, you must pay the actual cost and expenses it incurs for inspecting the supplier’s facility and testing such ingredients, supplies, and goods.
20. Third-Party Food Safety and Brand Standards Inspections: costs for conducting third-party inspections of Restaurant for compliance with food safety and brand standards
- Due Date: If incurred, on demand.
- Only payable if your Restaurant fails a third-party inspection, or you or your Restaurant receives a non-passing score in any of Popeyes’ then-standard metrics (or any successor metrics used by Popeyes to measure operational performance), and Popeyes requires a re-inspection or additional inspections.
21. Renewal: the then-current, standard Initial Franchise Fee, prorated for the renewal term
- Due Date: Upon signing the Franchise Agreement for the renewal term.
- Typical renewal term is 10 years and all renewals are subject to contractual requirements.
22. Extension Fee: the then-current Initial Franchise Fee, prorated for the extended term
- Due Date: Upon signing the Renewal Amendment to Franchise Agreement.
23. Supplemental Term Option: the then-current, standard Initial Franchise Fee, prorated for the renewal term
- Due Date: Upon signing the Franchise Agreement for the supplemental term.
- This fee covers both (i) the purchase of the supplemental option and (ii) the exercise of the supplemental 10-year renewal term. Renewal is subject to contractual requirements.
24. Securities Offering Review Fee: $5,000 or a greater amount, if necessary, to reimburse Popeyes for its out-of-pocket costs and expenses in connection with reviewing your proposed securities offering
- Due Date: Upon request for review.
25. Transfer Fee: $1,500 to $7,500, depending upon the transfer
- Due Date: Before transfer.
- $1,500 if transfer is to a corporation or other business entity of which you own 100% and such entity was formed for convenience of ownership. Otherwise $5,000 to $7,000 depending upon terms of Franchise Agreement being transferred.
26. Impact Study: $3,500 per study
- Due Date: If incurred, on demand.
- In connection with reviewing a proposed site, which could have impact on other franchised locations in close proximity to the proposed site, an impact study may be requested to further consider approval of the site.
27. Background Check Fee: $210 to $15,000
- Due Date: As incurred, on demand.
- Typically $210 for U.S. applicants, $1,000 to $15,000 for international investors.
28. Training Platform Maintenance Fee: $50 per month
- Due Date: On demand.
- Each Restaurant must pay a $600 annual training fee for access, use, and support of the training platform.
29. Restaurant Logs and Routines: $15 per month
- Due Date: On demand.
- Beginning in January 2023, each Restaurant must pay a $180 annual Logs and Routines fee for use and support of the training platform.
30. Miscellaneous Reimbursements, Purchases, Services: varies based upon the item
- Due Date: As agreed.
- For certain training programs Popeyes provides, it may require you to pay a materials or course fee.
- For certain product, promotional, operational initiatives, you must reimburse Popeyes for expenses it incur or amounts it pays for which you are responsible, and you must pay Popeyes as agreed if you purchase any incidental goods or special services from it.
31. Gift Card Services Transaction Fee: estimated 1.8% of any redeemed sales, may increase or decrease no more than one time per year. The minimum and maximum Transaction Fee will be 0.5% and 3.5% of redeemed sales, respectively.
- Due Date: Paid to the supplier who then pays the Transaction Fees to Popeyes.
- Popeyes requires all U.S. franchisees to sell and accept the Popeyes Gift Cards in Restaurants (“Gift Card”). To participate in the Gift Card program, you sign a participation agreement with the vendor.
32. Cure Fee: TRA: then-current Initial Franchise Fee; MTRA: balance of the Initial Franchise Fee multiplied by the number of Restaurants not developed under the Schedule
- Due Date: Payable at the time you fail to meet the development schedule under the TRA or MTRA.
- In addition to paying the Cure Fee, you must obtain site and construction approval by the extended dates granted by Popeyes.
33. Site Approval Extension Fee: $5,000
- Due Date: Payable at the time you request an extension of Site Approval under the MTRA.
- If your Site Approval expires under the MTRA, you may request an extension of your Site Approval within 30 days of expiration.
34. PLK Foundation: $1,000 per Restaurant per year
- Due Date: Payable on demand.
- You must contribute $1,000 for each year of the term of the Restaurants’ Franchise Agreement by participating in the in-Restaurant fundraising programs or by a donation.
35. Brand Damage Fee: amount of the next installment of Initial Franchise Fees you were required to pay to Popeyes under the Area Development Agreement before the date of termination
- Due Date: Upon demand.
- If Popeyes terminates your Area Development Agreement before expiration. Popeyes can also retain any Initial Franchise Fees paid under the Area Development Agreement.
36. Rescheduling Fee: amount equal to Popeyes’ out-of-pocket expenses incurred to reschedule opening of Restaurant
- Due Date: Upon demand.
- Only payable if you reschedule the opening of your first Restaurant under the MTRA less than 30 days before the scheduled opening date.
How much does your franchise cost in average?
I am interested in buying one in the united state.
Kindly contact me please
You can find the estimated franchise costs for Popeyes in a separate post:
https://www.franchisechatter.com/2014/05/03/franchise-costs-detailed-estimates-of-popeyes-louisiana-kitchen-franchise-costs-2014-fdd/
I want to know Franchise Fee: $50,000 for each year
The Franchise Fee is a one-time payment. It is the Royalty Fee that is paid weekly. After the term of the franchise agreement ends, you have the option to renew (provided that you meet certain requirements) by paying 50% of the then-current Franchise Fee.