Popeyes Louisiana Kitchen made big news and big sales in 2019 when they launched the “chicken sandwich wars,” a marketing battle that drew in over twenty brands including Chick-fil-A, KFC, and Wendy’s. The Popeyes chicken sandwich has proved popular both with customers and with social media fans, providing a 103% boost in traffic to restaurants during its early sales. Acquired in 2017 by Restaurant Brands International, which also owns Burger King and Tim Hortons, Popeyes is growing into one of America’s most popular chicken outlets.
How much is a Popeyes franchise?
The costs to set up a freestanding Popeyes franchise, one in its own building rather than in a mall or other outlet, ranges from $423,800 to $3,545,800 (Item 7, FDD 2021). This includes initial franchise fees, training, licenses, and opening supplies, but not the costs of real estate.
Real estate costs vary hugely with region and circumstances, and are one of the bigger costs for setting up a restaurant. If you’re considering a Popeyes franchise, you should look into local real estate and add these costs to the Popeyes estimate.
How much is the Popeyes franchise fee?
The initial franchise fee for a Popeyes restaurant is $50,000, payable before the restaurant is set up (Item 5, FDD 2021).
Once the restaurant is up and running, Popeyes charges 5% of gross sales in royalties and 4% of gross sales in advertising contributions, though the advertising fees may be lowered for restaurants in unusual locations.
How much does a Popeyes franchise make a year?
Average sales for a franchised freestanding Popeyes restaurant total $1,922,817 per year, and the average operating profit for such a restaurant comes to $460,418 (Item 19, FDD 2021). The company provides more detail in its franchise disclosure document (FDD) than some other chains, exploring the spread of sales and showing how these operating profits have been calculated.
Though this provides some insight into how Popeyes compares with other restaurants, without exploring all the expenses, the picture remains incomplete. Comparing metrics with other restaurants in the same category can give you an idea of how much you would make and whether this is likely to be one of the more profitable franchises in your area. Franchise Chatter subscribers have access to a range of tools for such comparisons, as well as a detailed review to give you more information.
How do you open a Popeyes franchise?
To become a Popeyes franchisee, you need to demonstrate relevant skills and experience, the finances to get the restaurant started, and the ambition to push for success.
To identify suitable candidates, Popeyes operates a five-step approval process:
- An online application.
- A discovery call, in which the Popeyes team explores your professional background and aspirations.
- A review of your application, assessing your expertise in running quick-service restaurants and your business plan. At this stage, the company also conducts background and credit checks and checks your legal entity documentation.
- In-person interviews with the Popeyes leadership team.
- If your application is approved, then the company will arrange your initial training and help you start looking for a restaurant site.
What are the pros and cons of a Popeyes franchise?
Popeyes has generated a lot of love for chicken sandwiches in the past few years, and the chain has flourished thanks to that attention. There’s good money to be made from chicken sandwiches, and in particular from the growing Popeyes brand.
Franchising brings several benefits over running an independent chicken restaurant. There’s training and support from the franchisor; guidance from fellow franchisees; a tested business model; and a business that’s easier to sell when you want to retire. Branded chain outlets have an easier time getting established, thanks to their combined marketing and strong brand recognition. You’ll benefit from all that chicken sandwich wars publicity, and the skills of the people who generated it.
On the down side, franchise fees can make a chain restaurant more expensive to start and add to ongoing costs. There’s not much room for creativity in how you present your store or flexibility to how you run the business. And if the chain over-expands, then your customers could be cannibalized by a new branch of the same franchise.
In short, there are huge financial benefits available, but at a cost.
Is the Popeyes franchise for you?
If you’re interested in the chicken sandwich business, then Popeyes has a lot of benefits. In the past few years, the brand has generated a lot of positive attention, demonstrating a gift for social media marketing. It has the financial backing of a large fast-food holding company and the stability that comes with it.
On the other hand, it’s possible that Popeyes has already peaked, and that you might be better off with a bigger brand, or a small one whose moment hasn’t come yet. Perhaps you’re not even sure that chicken is what you’re after. If you want to explore other options, then subscribe to Franchise Chatter to get more information on the power of different brands and which one might suit you.