Popeyes Louisiana Kitchen Franchise

Financing Details

Popeyes Louisiana Kitchen does not offer direct or indirect financing to its franchisees and does not guarantee obligations to third parties. However, Popeyes Louisiana Kitchen has agreements with two third-party equipment lenders: Ascentium Capital and LEAF Capital Funding, LLC. Both companies offer financing for equipment purchases, ranging from $5,000 to $2,000,000, to qualified franchisees not in default of their franchise agreement. Popeyes Louisiana Kitchen receives a non-refundable rebate of 0.35% of the total loans funded by each lender quarterly. For Ascentium, interest rates are fixed at the time of funding (around 8.25% per annum), with repayment terms of 12 to 72 months, and prepayments incur a 1% premium on the remaining balance. For LEAF, interest rates range from 8.60%-10.10% per annum, with repayment terms of 24 to 84 months, and no prepayments are permitted. Both lenders may require personal guarantees from owners and affiliates, and loan defaults can lead to acceleration of payments and collateral repossession.

Litigation Summary

Popeyes Louisiana Kitchen has been involved in several legal matters. In October 2024, a lawsuit was filed by Khalid Zia Syed and four entities he controlled, operating Popeyes restaurants in Toronto. They allege Popeyes Louisiana Kitchen improperly required a restaurant closure, insisted on certain purchases, unreasonably refused potential buyers, and engaged in unfair actions, seeking CAD $6 million in damages. This case is currently pending. Another pending case, filed in December 2020 by Pinnacle Foods of California, LLC, alleges Popeyes Louisiana Kitchen breached a Development Agreement, violated the implied covenant of good faith, and breached California business codes by improperly refusing to approve sites and terminating their agreement. This case is awaiting summary judgment after being transferred to Florida. Popeyes Louisiana Kitchen also initiated a lawsuit in October 2023 against Florida Pop, LLC, for unlawfully operating or failing to de-identify 52 restaurants after a limited license agreement expired, claiming breach of contract and trademark infringement. The defendants counterclaimed. This case was settled in March 2024, resulting in the sale of most restaurants and payment of attorney's fees. In a concluded case, Elite Cajun Foods II, LLC sued Popeyes Louisiana Kitchen in February 2019, alleging unlawful statements, fraud, and unfair competition related to the sale of six franchises. This case was settled in March 2019, with the plaintiff closing five restaurants and the case being dismissed. Additionally, in February 2020, Popeyes Louisiana Kitchen entered into multi-jurisdictional settlement agreements with several state Attorneys General. These settlements addressed allegations that "no-poach" clauses in franchise agreements violated antitrust and consumer protection laws. Popeyes Louisiana Kitchen denied wrongdoing, had already removed these provisions from current agreements, and agreed not to enforce them in existing contracts, without any monetary payments.

Renewal Conditions

To renew their franchise with Popeyes Louisiana Kitchen, franchisees must provide written notice between 6 to 12 months before the initial term ends. They must be in good standing, which means satisfying all monetary obligations, complying with the Franchise Agreement and other operational standards, having no pending litigation with Popeyes Louisiana Kitchen or its affiliates, and meeting current financial ratios for new franchisees. Franchisees are required to reimage, renovate, refurbish, and modernize their restaurant to meet Popeyes Louisiana Kitchen's then-current design standards and pay a renewal fee equal to 50% of the standard initial franchise fee. They will also need to sign Popeyes Louisiana Kitchen's then-current franchise agreement, which may have different terms, including potentially higher royalty and advertising fees, and different Managing Director requirements. Franchisees also have an option to purchase an additional 10-year renewal term (Supplemental Renewal Term) if in good standing, by paying 50% of the then-current initial franchise fee and executing an amendment to the Franchise Agreement.

Staffing Notes

Popeyes Louisiana Kitchen requires specific staffing to ensure operational standards. Each franchised restaurant must employ at least one restaurant general manager and three or more shift managers, all of whom must be "Popeyes Certified Managers" with a current ServSafe Food Safety Certification. These managers must complete the Popeyes Training Program (PTP) for their respective roles. A qualified replacement must be enrolled in PTP within 30 days if any manager leaves. The franchised restaurant must always have on-site supervision by a Popeyes Certified Manager. The designated Managing Director must be actively involved, making regular visits to ensure compliance with operating standards. For franchisees operating multiple Popeyes restaurants, an additional supervisor is required upon opening the 8th restaurant and for every subsequent 7-10 restaurants. Franchisees are solely responsible for all employment decisions, including hiring, firing, compensation, and compliance with employment laws; Popeyes Louisiana Kitchen is not a joint employer.