What’s the Total Cost to Open a Popeyes Franchise? (2022 Update)
Popeyes franchise is a worldwide fast food fried chicken restaurant brand. You might be interested in launching a Popeyes franchise location because owning a Popeyes franchise is a very lucrative business. Everything you need to know about the Popeyes franchise cost is available in this article.
Popeyes Franchise Cost
Here is a brief analysis of the start-up cost and essential needs for starting a Popeyes franchise;
Liquid Capital; $500,000
Net Worth; $1,000,000
Initial Franchise Fee; $50,000
Initial Total Investment; $383,500–$2,620,800
A Popeyes restaurant requires a cost of $50,000 initial franchise fee, and between $383,500 and $2,620,800 is estimated to be invested overall in each location. Why are the predicted Popeyes franchise cost in such a wide range?
Remember that location can have a significant impact on how much a property costs. Real estate expenses will be significantly higher for a franchise owner in New York City than, say, in Baton Rouge.
Determining where you’ll probably fall on that overall investment range will therefore take it into account.
There are additional estimated upfront costs as well as ongoing charges. The marketing fund receives about 4% of your gross sales, and the royalty fees receive about 5%.
There are ways to reduce the $50,000 franchise fee, notwithstanding the initial cost.
If you are eligible for their Women and Minorities Development Incentive Program or Veterans Development Incentive Program, you might be able to take $22,500 off the cost to make it $27,500, which is a much more fair price.
A further breakdown of the costs can be seen below;
Additional Funds; $20,000–$30,000
Business License; $300–$600
FF&E Signage and Technology; $165,000–$485,000
Initial Training; $17,200–$24,200
Insurance; $9,000 – $18,000
Opening Supplies; $11,500–$23,000
Site Work; $0 – $650,000
Soft Costs; $8,000–$265,000
Utility Deposits; $2,500–$50,000
Total Including Franchise Fee; $383,500–$2,620,800
About Popeyes Franchise
Louisianan Al Copeland had thought around the beginning of the 1970s. To take on KFC, he intended to open a restaurant.
He carried out his plan by founding “Chicken on the Run” in Arabi, Louisiana, just outside of New Orleans, in June 1972.
Sadly, it was shut down a few months later. Unfazed, Copeland reportedly opened the restaurant again a few days later under the moniker Popeyes Mighty Good Chicken and with a new, hotter recipe.
Popeyes has undergone numerous ownership and name changes over the years.
Popeyes Louisiana Kitchen is the current name, and Restaurant Brands International is the owner (also the parent company of Burger King, Tim Hortons, and Firehouse Subs).
After its model, KFC, Popeyes is currently the second-largest chicken franchise worldwide.
Popeyes restaurants can be found in malls, free-standing structures, storefront sites, and a variety of other locations both in urban and suburban areas as well as within other communities.
Walk-in, drive-thru, sit-down, takeaway, delivery, and any combination of these formats are all possible at Popeyes locations. As a result, the initial investment range for a Popeyes franchise can be rather wide.
Average Sales and Profit Per Year
Annual System Sales and Revenue
Popeyes’ systemwide revenue climbed by 19% to $4.40 billion in 2019, exhibiting brisk growth from prior years.
We recently discovered sales data for the fourth quarter of 2020 to be lower than anticipated, yet still showing an increase. The company’s overall revenue for the year was $4.968 billion.
A number of things caused this, including the worldwide epidemic. Despite the lower forecasts anticipated, the corporation still has ambitions for a return to rapid growth and higher revenues.
Annual Unit Sales on Average
Based on the performance in 2020, the average yearly sales per unit will be over $1,800,000. Naturally, this only includes sales and does not account for profit after expenses.
As was already noted, continuing costs like a royalty of 5% and they fixed a fund for advertising expenses to take into account.
Compared to other chicken restaurants like KFC, which has average shop sales of $1,200,000 annually, these figures are astounding.
According to Popeyes FDD, operating profits per restaurant were an average of $312,782 (franchise disclosure document). This figure represents the profit before taxes, expenses, and debt interest are taken into account.
Furthermore, the business, which is highly profitable in the US and Canada, wants to expand worldwide into Asia because fried chicken joints do well there.
Since the company saw good growth for 5 straight quarters, the leadership has recently shown that they can carry out their business plan.
Average Franchise Profit
Due to the multiplicity of variables that affect franchise profits, a franchise’s average profit margin can be expected to be very high.
For instance, a franchise that requires a brand-new facility will have to spend more on building expenses and might not see the same returns as a business with minimal to no building expenses.
Having stated that, the amount could range from $50,000 to $200,000.
The figures are not very accurate because there are many variables at play, some of which may not matter to investors.
Franchise earnings might be as little as $50,000. Due to the fact that Popeyes restaurants frequently operate in larger, more modern buildings, they may be expensive.
Businesses might also require a larger space and more equipment than, for example, a boba business. Once more, these figures do not accurately reflect all of each restaurant’s costs and profits.
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Steps in Opening a Popeyes Franchise
Make sure you have enough capital.
You need to be valued at more than $1,000,000 to open a Popeyes Louisiana Kitchen business.
Recognize the financial commitment needed for a restaurant franchise.
Costs associated with construction and real estate, tools and signs, licenses and permits, uniforms, insurance, and other expenses must all be taken into account.
Consider your past expertise and strong points.
Before submitting an application to open a Popeyes Louisiana Kitchen franchise, you should carefully assess your prior business experience.
Analyze the supply in the market.
Before moving forward with the franchising application, you should check the market availability for Popeyes Louisiana Kitchen franchises and determine if there are markets available in your target location.
Send your application in. The franchise team at Popeyes Louisiana Kitchen will examine your application.
Upon receiving your online application, you will receive a confirmation email. In this email, we will also include the franchise owner’s contact information.
Open your Popeyes Louisiana Kitchen franchise after receiving clearance.
Following the conclusion of your background and financial checks, you will be granted franchise clearance. Only applicants who fully satisfy the standards of franchise owners will receive approval.
We listed the approximate franchise expenses for certain nations;
- The total amount needed to open a Popeyes Louisiana Kitchen restaurant in the US ranges from $383,500 to $2,620,800.
- Investment ranges from CAD 490,600 to CAD 3,352,800 in Canadian dollars.
- The investment ranges from E£6,04 million to E£41,29 million in Egyptian pounds.
- Investment is around £283,800 to £1,939,800 in UK currency.
- The investment ranges from AUD 503,350 to AUD 3,439,800 in Australian dollars.
- Investment ranges between EUR 312,800 and EUR 2,137,800 in German currency.
- The investment ranges from Rs 2.81 crore to Rs 19.22 crore in Indian rupees.
Advantages of Opening a Popeyes Franchise
Due to their battles with rivals like Chick fil’A over chicken sandwiches, Popeyes has received a lot of media coverage and attention. The company’s social media presence has grown significantly as a result of this marketing strategy.
Not to mention that they frequently sold their chicken sandwiches out, which has increased sales. Having said that, there are other benefits to having this franchise in addition to their famous chicken sandwich.
In addition to its chicken sandwiches, Popeyes regularly changes its menu with the most recent fashions. The fact that they offer training to new franchises is an additional benefit.
Even if they do prefer candidates with past restaurant experience, it is helpful to have a refresher on how this particular establishment runs. The second is that they have good financial success.
As was already noted, they generated more revenue ($1,800,000,000) than competitors like KFC ($1,200,000).
Although there are additional costs, which we shall discuss in more depth in a moment, overall it is a rising brand that generates respectable earnings.
The fewer franchise locations or competitors is essentially the last benefit. Popeyes has fewer open stores than McDonald’s or Subway (each of which has more than 44,000 locations), which has two advantages.
One is that there are several chances for growth. Popeyes is searching for franchisees to open across several U.S. states as well as provinces in Canada.
If you’re willing to relocate, this could be a fantastic opportunity. Popeyes presently controls less than 4% of the market for fried chicken sandwiches, according to a recent Forbes article.
There is a lot of room for expansion, particularly in markets where Popeyes is less well-known. A franchise with development potential is something that a prospective franchisee wants, however, there are undoubtedly certain difficulties linked to its modest size.
Difficulties Faced in Opening a Popeyes Franchise
Opening a franchise involves several basic difficulties. The number of fees should be the first consideration.
Even though the majority of franchise businesses are profitable, it’s crucial to know how much money you would actually make after fees so that you aren’t caught off guard.
Although we included a few samples of different cost kinds and the proportion you would need to pay upfront, this did not accurately represent the total annual fees you would pay.
The initial expense of opening a Popeyes business is another difficulty. If you’ve done your research, you’re aware that there are other eateries that are equally well-liked and more affordable to purchase.
Popeyes has been performing well in terms of sales and has been steadily expanding, but it might be challenging to get your foot in the door and match their requirements.
You may need to overcome this challenge at first because the Popeyes franchise cost is a little greater than that of other franchises.
The stores need more room than other chains, but this may also increase their profitability. A store with a drive-through, for instance, has a higher initial cost but the potential to attract more consumers.
It’s not unusual for a restaurant’s drive-thru window to increase gross sales by more than $200,000.
The number of units across North America is the final piece of information worth taking into account. Less than 4,000 locations for the company exist worldwide, as was already mentioned.
While compared to larger concepts like KFC (22,000+ locations) and Wendy’s (6,000+ locations), this may seem like a lot, they are still little.
This indicates that there are still many chances for market expansion.