Popeyes Rolls Out Multi-Year Plan to Build Profitability

    The three-pronged strategy covers elevated operations, menu expansion, and meticulous store design. 

    Fast Food | May 2, 2023 | Ben Coley
    Popeyes' chicken sandwich.
    Popeyes U.S. will use knowledge from international markets to streamline operations.

    Popeyes recently unveiled a multi-year plan to increase average four-wall profitability to $300,000 by the end of 2025. 

    The strategy, called Easy to Love, was introduced last week by president Sam Siddiqui at the chain's annual franchise convention in Phoenix, which had nearly 600 participants. 

    RBI CEO Josh Kobza said it will start with simplifying restaurant operations for franchisees and employees, ultimately leading to guest satisfaction. This will involve initiatives around making kitchens easier to run. 

    "Our team members tell us and I've experienced it firsthand—when working back of house, we know restaurants drive much higher sales traffic and profitability when they have great operations," Kobza said during the company's Q1 earnings call. "So this part of the plan is designed to help more restaurants be in that top tier."

    The Popeyes team traveled to several international markets in the past six months and embraced best practices, the CEO noted. Those learnings and innovations will be incorporated into the U.S. business. Some examples include variations in kitchen equipment and design, streamlined procedures, and digitization in the front and back of house. 

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    The brand will borrow blueprints from leading countries like Spain, the U.K., and France. 

    "We are now testing these elements in the U.S. and believe many will become core to our operating plan over the next year or two," Kobza said. 

    The strategy's second component is building off of what Popeyes is known for—bone-in chicken and the chicken sandwich—while leaning into menu expansion. In January, the chain brought back Ghost Pepper Wings, which drove higher average check and traffic, improved gross profit margins, and attracted younger consumers. The product was so successful that it sold out in two weeks. Given its prominence, the wings are back on the menu as a permanent item and more innovation will come in this food category, Kobza said. 

    The final tenet of Popeyes' plan is developing modern and convenient restaurants and helping operators find high-quality real estate. In 2022 more than 70 percent of openings had at least one drive-thru and were either with top-tier existing franchisees or new franchisees.

    "I know the Popeye system left the Phoenix convention excited and confident in the direction of the brand for the coming years," Kobza said. "We have an unmatched product and brand and if we can make it a little easier for our team members and guests, I am sure we're going to achieve great things."

    Popeyes U.S. same-store sales lifted 3.4 percent in Q1, lapping a 4.6 percent decline last year. Systemwide sales grew 9.1 percent year-over-year. Restaurant profitability increased compared to 2022 as well. The company finished Q1 with 4,178 stores globally—2,947 in the U.S. and 1,231 internationally. There were more than 200 North America openings in 2022, featuring the highest number of new franchisees and the highest percentage of freestanding single or double drive-thru locations in five years.