Why Popeyes went Bankrupt and How Much a Franchise Costs and EarnsNovember 1, 2022
How much a Popeyes costs to open, how much you can earn, and how the company failed twice before becoming the billion dollar behemoth you see today.
If you think Popeyes was named after Popeye as in sailor man, you would be wrong. Popeyes was actually named after Jimmy “Popeye” Doyle, an egg eating, woman lovin, cop played by Gene Hackman in the French Connection, way back in the 70’s. Al Copeland, a shining example of 70’s cool himself, founded the brand which actually failed when he first started. Als first restaurant was called “Chicken on the Run” and opened in Louisiana. Al was going up against KFC that was doing very well at the time. Chicken on the Run failed, that first location closing in 4 months.
Take notes kids, Al didn’t blame the world or curse the Colonel, he brushed himself off and only 4 days after his first restaurant closed he opened a new shop called “Popeyes mighty good chicken”. Franchising started in 1976 and by 1985 Popeyes already had 500 locations open, but they weren’t doing that well financially. Until – the Biscuit. Biscuits were added in 1983 and were a huge hit at one time accounted for 25% of all restaurant sales. Company starts doing well and buoyed by the success in 1989 Popeyes acquires Church’s chicken which seriously overleveraged the company. In 1991 Al’s company Copeland Enterprises had their second financial setback and filed for bankruptcy protection with 391 million dollars in debt.
Did Al throw in the towel? Nope, he requested permission to restructure which was approved and a new company “Americas Favorite Chicken Company” was formed and went public with a $142m IPO. In 2004 the company was sold to Arcapita. In 2017 RBI brands, who also owns Burger King and Tim Hortons, acquired Popeyes for 1.8 billion dollars. See the lesson here, from a failed restaurant, to a bankruptcy to a billion dollar company in a single human lifetime.
Today Popeyes has over 2500 locations in the US and is one of the most Iconic franchise brands in the USA. But how much does a franchise cost and how much can you earn? Let’s take a look.
There are actually three investment levels for a franchise based on the type of restaurant. You’ll invest between $423,800 and $3,545,800 for a new free-standing facility, between $383,500 and $1,362,800 for a new in-line facility, and between $109,500 and $749,300 for a delivery facility. An in-line store is a location you see in a strip mall situation and it generally cheaper than a freestanding building. Keep in mind this amount does not include your real estate, this is just for your franchise fee, equipment, and buildout costs for the store.
So after you invest how much can you make with a Popeyes? To keep the video short we’ll look only freestanding locations so this is the investment up to 3 million. An average Popeyes location in 2020 grossed around 1.9 million, which puts them at the number 12 spot for earnings on the QSR50. Is Popeyes a good investment? It depends on many factors including market demand, demographics, budget, operator skills and much more. If you need help finding a franchise call Franchise City brokers: https://www.franchise.city/our-services