popeyes

RR Insights Journal

Insightful Q&A with Popeyes operator John Brodersen about the state of the industry. Topics covered include top-line, labor, food costs & real estate. Also executive summaries for Denny’s & Arby’s.

RR Insights Journal

• The following data is based on RR’s Annual Lender Unit Economic Survey representing more than 15,400 franchised units (14,800 QSR and 600 FSR across 29 chains) for FYE 2020.

2Q20 Investor Call Summary & Analysis

Hopefully the trough of a shocking Black Swan event, 2Q20 gave us an average comp decline of -15.4% for 23 $1B+ chains under coverage. Notably, there was a very wide dispersion of results with a comp high of +32% (Wingstop) all the way to a low of -59% (IHOP) as consumers decidedly shifted away from dine-in to low-contact off-premise solutions.

Insights Journal: August 2020

Opinion: In the end, the industry’s mission must be to find a way back to normal, not accepting a “new normal”; While 1H:20 franchisee EBITDA valuation multiples declined, it is +7.4% higher than the 12-year low set in 2009; The average 2019 EBITDAR margin for the $1B+ chains improved slightly to 18.8% (but remains near the 17 year low); Popeyes’ eye-popping success with its chicken sandwich…; Taco Bell must wait for an eventual return of the Millennials and late-night.

Popeyes’ brand positioning around a unique, flavorful Louisiana heritage (slow cooking, served fast) provides the brand permission to extend its menu beyond bone-in chicken. Its core bone-in chicken is infused with a Louisiana-inspired seasoning dry rub that is applied to fresh chicken which marinates for 12 – 72 hours and is then hand-breaded. The brand’s resounding social media marketing success around its new chicken sandwich continues to be the talk of the town.

1Q20 Investor Calls: Key Points & Analysis

In a shocking Black Swan event, the industry suffered the forced closing of all dining rooms in late March 2020. While this shock was less troublesome to concepts already heavily oriented towards drive-thru and off-premise, the devastation for sit-down oriented chains has been previously unimaginable.

4Q19 Investor Calls: Key Points & Analysis

The successful brands continue to add value in some form or another sufficient to drive higher tickets. It could be from menu improvements or innovation or digital order platform upgrades that add convenience to go with a higher check. It seems that those consumers with means can be cajoled into spending more if they perceive a value-added proposition in some form that resonates.

Popeyes

Popeyes' Louisiana bold/spicy menu profile emphasizes its slow cooking techniques which are unique to QSR. Its core bone-in chicken is infused with a Louisiana-inspired seasoning dry rub that is applied to fresh chicken which marinates for 12 – 72 hours and is then...