Popeyes Business Plan

Business Plan Jayla Hurd Megan Ivy Sydney Smith

B AD-4013-901 Professor Alexis Downs University of Oklahoma November 28, 2019

Table of Contents Table of Contents

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Executive Summary

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Vision and Mission

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Vision Mission

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Environmental Analysis Macroenvironmental Analysis (PESTEL) Political Factors Economic Factors Social Factors Technological Factors Environmental Factors Legal Factors Industry Analysis Competitive Rivalry Supplier Power Buyer Power Threat of Substitutes Threat of New Entrants

4 4 4 6 8 9 10 11 12 12 15 17 18 19

Products and Services

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Market Analysis

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Customers Needs of Market Competition Location Projected Market Share

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Management Team and Human Resources

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Background and Roles of Key Individuals

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Day to Day Operation Activities Marketing and Advertising (including the grand opening and systematic promotions) Production Personnel, including hiring strategies Customer Service Protocols Administrative Bookkeeping Legal form of Business (LLC, Corporation, etc.)

Cash Flow, Income Statement, and Balance Sheet

29 29 30 30 31 31 32 32

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Statement of Cash Flows Income Statement Balance Sheet

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Funds Required/Used Prior to Opening

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Funds Required/Used After Opening

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Critical Risks

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External Factors Internal Operations Constituent Relationships Marketplace

Works Cited

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Executive Summary The following plan details the methods and processes used to determine Norman, Oklahoma as a viable candidate to implement a Popeyes Louisiana Kitchen franchise. This plan delves into the vision and mission of this particular franchise, an environmental analysis, products and services offered, an overall market analysis, a look into the management and human resources team, operational activities, financials, and risks that this venture may face.

With regard to our environmental analysis, we have noted several important findings. Firstly, social media has a significant impact on the political stance and issues that Popeyes faces.

Additionally, the addition of the chicken sandwich to their menu has sparked controversy from competitors, such as Chick-fil-a. Economically, there has been a rise in the consumption of nondurable goods, as well as a rise in average annual income. This has contributed to an increase

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in demand for Popeyes products. From an external standpoint, Popeyes faces steep competition, namely from Chick-fil-a. This industry generally possesses medium barriers to entry, but the threat of substitutes is quite high. Suppliers face stiff competition from one another, and the only buyers consist of direct consumers.

This Popeyes location will generate a 1.9% market share of the fast food chicken restaurants.

This number will grow over the next three years to reach about 10.8% of the total fast food chicken restaurant market shares. There are various critical risks that also contribute to the potential success of a Popeyes location in Norman. Some of these are external, such as a robbery or severe weather. Others are internal, such as the relationship between the landlord and franchisee, or the franchisee and the franchisor. In all, a wide variety of factors, both positive and negative, help to make this venture a likely candidate for success in Norman, Oklahoma.

Vision and Mission Vision We strive to bring the community together through our business and brand, with an emphasis on being the most successful fast-food restaurant in Norman. We share a passion for people, food, and prosperity.

Mission Our goal as a franchise is to continually increase our level of success. Our success is defined by outstanding customer service and increasing profitability. This is achieved through a cohesive work environment with effective leaders in place.

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Environmental Analysis Macroenvironmental Analysis (PESTEL) Political Factors Upon the initial release of Popeyes chicken sandwich, Twitter targeted the black community.

Users were providing backlash to members of the black community for waiting in line for a chicken sandwich, rather than using that time to stand in line to vote. This sparked a heated political debate that went viral, discussing white supremacy, racism, and the general division being created between the white and black communities.

Though this narrative against the black community was initially particularly negative, some Twitter users have used the topic to create dialogue about both voting and purchasing a Popeyes chicken sandwich. This promoted unity and strength within the black community.

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Another political factor that affects Popeyes is its implied political stance. Amid the war between Popeyes and Chick-fil-a on Twitter, liberal users began to call out Chick-fil-a for their donations to anti-LGBTQ+ organizations. Furthermore, Chick-fil-a provides donations to support Donald Trump’s reelection campaign, which many consumers have not taken kindly to. This has led to Popeyes being labeled as a “liberal” restaurant, since it is inclusive of the LGBTQ+ community and people of color. This creates a political identity for Popeyes, even though it was not explicitly stated by the company.

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Economic Factors During the past 5 years (2014-2019), the United States has experienced a prosperous economy in which the average household income has increased (Amir, 2019). Along with that, unemployment decreased by an average of 9.6% during this 5 year period (Amir, 2019). With that being said, consumers have more money and more disposable income that can be put towards the consumption of Popeyes products. In fact, over the same 5 year period, a direct correlation was noticed between average household income and per capita poultry consumption (Amir, 2019).

From an industry perspective, the number of fast food chicken enterprises has increased significantly throughout the United States. Over the past 5 years, the number of different fast food chicken companies has risen to 104 in 2019, increasing by an average of 1.8% each year (Amir, 2019). Furthermore, the number of establishments within each enterprise has also risen by an average of 1.6% annually over this 5 year period (Amir, 2019).

As far as what the future holds, extrapolated data indicates that this industry is expected to continue to grow through the next 5 year period (2019-2024) (Amir, 2019). Industry revenue is expected to increase each year by 4.7%, resulting in over $43.3 billion dollars by 2024 (Amir, 6

2019). The number of enterprises in this industry is expected to continue to grow, as well. This number is expected to grow by 3.2% annually, resulting in over 122 different companies by 2024 (Amir, 2019).

Social Factors Widely used social media platforms such as Instagram and Twitter have caused both controversy and increased demand for Popeyes. On August 12, 2019, Popeyes released their first-ever chicken sandwich (Meyer, 2019). This immediately sparked interaction from competitors such as Chick-fil-a and Wendy’s on Twitter. The back-and-forth humorous banter between the fast-food chains immediately went viral, driving demand and attention for Popeyes.

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Additionally, Popeyes has long resonated with the black community, as its roots are in New Orleans and emphasizes its Cajun flare. Popeyes’ release of its chicken sandwich grabbed the attention of the black community and caused demand at Popeyes locations throughout the United States to skyrocket to the point where the sandwiches quickly sold out.

When the Popeyes chicken sandwich sold out, an interesting trend arose on Instagram. Migos group member, Quavo, bought an extensive number of the chicken sandwiches and made a post saying he was selling them at $1,000 a pop (Asmehlash, 2019). This brought even more attention to Popeyes, causing a further increase in demand for the already limited sandwich.

Technological Factors The infinite growth and innovation of technology poses several opportunities for Popeyes. For example, Popeyes hopes to implement self-service kiosks in order to provide ease of transaction, as well as an additional convenience factor (Amir, 2019). The constant evolution of technology also means that Popeyes must keep their point of sale (POS) system up to date (Amir, 2019).

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Doing so will provide Popeyes with an advantage of being user friendly. Thirdly, the rise of delivery applications on mobile devices provides an additional means for consumers to place and receive food orders. Some of these mobile applications include Doordash, Grubhub, Postmates, and Uber Eats.

Environmental Factors All Popeyes locations are vulnerable to environmental threats, which can drastically differ between locations. The threat of severe weather has the ability to damage or destroy any Popeyes restaurant, and other events occur in the environment that can have a detrimental impact on a location, as well. For example, a Popeyes restaurant in Cleveland, Ohio was left in shambles after a large number of fireworks were released and directed towards that particular location (Hughley, 2018). When this incident occurred, there were reports of broken windows, shattered glass remnants, burned holes in the ground, dented metal casings, and projectiles found inside the remaining parts of the building (Hughley, 2019).

Oklahoma is particularly susceptible to tornadic activity. In 2018 alone, Oklahoma had a reported number of 42 tornadoes (U.S. Department of Commerce, & Noaa, 2018). Out of the 42

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tornadoes, 4 of them touched down in Cleveland County (U.S. Department of Commerce, & Noaa, 2018). As Norman resides in Cleveland County, it has roughly a 10% chance of a tornado per year in Oklahoma (U.S. Department of Commerce, & Noaa, 2018). This means that the risk of our Popeyes location in Norman has less than a 10% chance of being damaged at all by tornadic activity.

Other forms of severe weather that could impact Popeyes in Norman are hail, snow, and ice.

Snow and ice have the potential to put the restaurant out of service for a given amount of time.

Hail, on the other hand, has the potential to damage the restaurant physically, posing a threat to equipment, signs, and windows.

Legal Factors Popeyes is vulnerable to legal action if a customer or other person finds grounds to sue or take legal action. For example, when Popeyes released its infamous chicken sandwich, a man from Tennessee filed a lawsuit when the restaurant ran out. He based his case on the grounds that he fell victim to false advertising and deceptive business practices by a public entity (Heller, 2019).

He also claims that his car became damaged from the rage of customers when the sandwich had sold out (Heller, 2019).

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Another case that Popeyes must face is the stabbing in Oxon Hill, Maryland. The company’s high-demand chicken sandwich returned early in November (2019), and hours later a man was stabbed to death on the Popeyes premises. The police report claims that the victim cut in line to receive a sandwich faster, leading to a heated argument with another customer (Holcombe and Riess, 2019). The argument escalated to the point that the victim was stabbed numerous times by the man who confronted him for cutting in line, ultimately resulting in his death (Holcombe and Riess, 2019). Popeyes made a statement claiming they are investigating to determine whether or not they must take legal action as a company, or if it is solely in the hands of the assailant and the victim (Holcombe and Riess, 2019).

In situations like the aforementioned, Popeyes has no choice but to be involved in legal action.

However, Popeyes can do its part in reducing legal turmoil by following all franchise guidelines and rules, as well as corporate, state, and federal laws.

Industry Analysis Competitive Rivalry Competition in the fast-food chicken industry is fairly high from Popeyes’ perspective. This is because Popeyes holds the fourth largest market share in this industry. With that being said, the largest market share is held by a combination of smaller companies, so there are only 2 companies that reside in a greater percentage of the market than Popeyes. These companies are Chick-fil-a and Kentucky Fried Chicken Corporation (Amir, 2019).

Chick-fil-a dominates the industry with a market share of 27.9% (Amir, 2019). This makes the

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threat of substitution from Popeyes to Chick-fil-a high, seeing as Popeyes only occupies 10.8% of the market share (Amir, 2019). Furthermore, there are 2 stand-alone Chick-fil-a locations within the city of Norman, as well as one located within the student union at the University of Oklahoma and one within the local shopping mall. This increases the likelihood of Chick-fil-a being used as a substitute because there are 4 different areas in Norman to acquire such food, whereas there will only be a singular Popeyes location. Consumers may choose Chick-fil-a over Popeyes purely on the basis of location convenience.

Kentucky Fried Chicken Corporation (KFC) also serves as a competitor for Popeyes. This company currently occupies 14.6% of the industry’s market share, which is just above Popeyes (Amir, 2019). Additionally, there are 2 KFC locations in Norman, which again, increases the amount of competition for Popeyes, as there is more than 1 location that consumers can choose from.

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The restaurant chain that owns the fourth-most amount of market share in the fast food chicken industry is Zaxby’s Franchising, LLC. This company only owns 8.1% of the market, but this is still comparable to that of Popeyes (Amir, 2019). There is only 1 Zaxby’s location in Norman, and it is located in the central area of Norman. This particular franchise does not serve as a severe threat with regard to competition, as there is only 1 location and the company is not as popular as Chick-fil-a or KFC. While it still serves as a threat and is worth noting, it is not as big of an issue as the other companies mentioned.

Supplier Power There are several industries that serve as suppliers for Popeyes. These include dairy wholesaling, egg and poultry wholesaling, and frozen food wholesaling. Each of these industries serves as a

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key piece in allowing a Popeyes restaurant to function properly.

Dairy wholesaling includes all dairy products that are not dried or canned (Zheng, 2019). This includes butter, cheeses, mik, and yogurt (Zheng, 2019). These products are shipped to Popeyes locations to serve as ingredients to be used in the food products that Popeyes has to offer.

Competition in this industry is rising, causing the growth in this industry to slow (Zheng, 2019).

Intense competition means that these dairy suppliers may begin to compete over customers like Popeyes.

The egg and poultry industry is on the rise with regard to consumption patterns (Fernandez, 2019). This will increase overall revenue in the industry, increasing its power in the market (Fernandez, 2019). This industry is comprised primarily of specialty wholesalers that prioritize customers in the retail and food service sectors (Fernandez, 2019). The number of egg and poultry wholesalers is low, which makes competition between existing wholesalers extremely high (Fernandez, 2019).

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Frozen food wholesaling is also increasing drastically with regard to consumption (Moses, 2019). This industry wholesales frozen foods, excluding that of dairy products (Moses, 2019).

The primary products that this industry ships includes frozen beef, pork, poultry, seafood, vegetables, fruits, bakery products, pizzas, and frozen meals (Moses, 2019). Frozen foods are necessary for restaurants like Popeyes because the foods are able to stay fresher for longer.

Additionally, these foods typically do not have any preservatives, as the cold temperatures they are kept in help to keep them fresh. This helps Popeyes because they are able to have fresh foods shipped to franchise locations in bulk, where each franchise is able to store any excess food products for extended periods of time.

Buyer Power There is only one industry that holds buying power for Popeyes. This buying power belongs solely to consumers (Amir, 2019). Households serve as the key demand drivers of the products and services that Popeyes has to offer (Amir, 2019).

Since 1980, consumer spending was increasing dramatically (Bureau of Economic Analysis, 2019). However, these expenditures came to a halt in 2008 with the economic recession (Bureau of Economic Analysis, 2019). Several years later, consumer spending gradually started to increase. Through 2017, consumer expenditures were continuing to steadily rise (Bureau of

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Economic Analysis, 2019). Though consumer expenditure is still slowly rising, the amount of money spent on durable goods is expected to decelerate by 2.3% by the end of 2019 (Bureau of Economic Analysis, 2019). This favors franchises like Popeyes, as this company specializes in nondurable goods meant to be consumed on the spot. Since consumers are less likely to spend money on durable goods, they will have a greater amount of disposable income to spend on fastfood. The following graphic indicates the percentage change in consumer spending from 1980 to now. Additionally, the Bureau of Economic Analysis has used previous and current trends to extrapolate the expected amount of money consumers will spend through 2026.

Threat of Substitutes Aside from Popeyes’ direct competitors in the fast-food chicken industry serving as options for substitutes, there are several other fast-food industries that pose threats for substitution, specifically in Norman, Oklahoma. These industries include the overarching fast-food industry, the fast-food burger industry, sandwich and sub store franchises, and bakery cafes. The restaurants that would most likely be used as a substitute for Popeyes are McDonald’s, Wendy’s, 16

Burger King, Subway, Jimmy John’s, Starbucks and Panera Bread Company. There are also quick service substitutes such as Chipotle Mexican Grill, Domino’s, Papa John’s, and Panda Express that fall under different categories of food types than Popeyes.

As can be seen, there is a wide range of quick service restaurants that can be used as substitutes for Popeyes. Of the mentioned restaurants, there are several that have numerous locations in Norman. This increases the chance that these restaurants would be used as a substitute for Popeyes, as there is a larger number of substitutes to choose from. McDonald’s is the most dominant force of the available substitutes, as it holds the largest market share in both the fastfood industry and the fast-food burger industry (Hyland, 2018). There are 3 McDonald’s locations in Norman, all scattered in different areas of the city. This provides convenience of location for the consumer, which Popeyes will not have, as there will only be 1 location. This is what makes McDonald’s a large threat of substitution.

Threat of New Entrants A company desiring to enter the fast food chicken industry will tend to have medium barriers to entry (Amir, 2019). Though the competition in this industry is high, the remaining factors that determine the threat of new entrants remain medium or low (Amir, 2019). These factors include concentration (medium), life cycle stage (growth), capital intensity (medium), technology change (meidum), regulation and policy (medium), and industry assistance (low) (Amir, 2019). Initial costs to enter this industry are typically reasonably low, due to the fact that the franchisee has the ability to lease existing forms of capital, which would allow the franchisee to enter the industry without having to buy all new equipment, real estate, furniture, etc. (Amir, 2019). Another advantage for franchisees is that the franchiser usually provides training for employees and the

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franchised location (Amir, 2019). The only downside to leasing and working directly with the parent company is paying royalties (typically between 5.0% and 15.0%) to the franchiser (Amir, 2019).

The top four companies in this industry account for just over 60% of its revenue (Amir, 2019).

These companies are Chick-fil-a, Kentucky Fried Chicken Corporation, Popeyes Louisiana Kitchen, and Zaxby’s Franchising, LLC (Amir, 2019). This is an advantage for franchisees, as they are able to take advantage of economies of scale. With that being said, a franchisee wanting to enter the industry under Popeyes will likely succeed due to Popeye’s market share of 10.8% (Amir, 2019).

Products and Services Popeyes Louisiana Kitchen serves a variety of menu items, which may vary slightly between

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locations and some offerings may change seasonally. Fried chicken pieces, chicken tenders, and fried shrimp make up the standard proteins offered by the restaurant, with the several sides to choose from, including green beans, cajun fries, mashed potatoes with gravy, biscuits, red beans and rice, coleslaw, and cajun rice. The sides and meats can be paired together with a soft drink to create combo meals, and apple pie is available at every location for desert. Additionally, Popeyes has been producing and selling limited releases of their voodoo tenders and infamous chicken sandwich, further adding to the menu selections.

With regard to the industry that Popeyes falls under, there are several overarching products and services offered. The main component of the products and services offered in the fast-food chicken industry is that of meals prepared for immediate consumption on the premise of the restaurant (Amir, 2019). This occupies 39.1% of the products and services segmentation.

Additionally, 28.2% of the product segmentation belongs to meals prepared and delivered via a drive-thru (Amir, 2019). These 2 segments make up the majority of the products and services, but there are still several others. For example, 18.5% of products and services belongs to the meals that are prepared for immediate consumption off-premise (Amir, 2019). Beverages occupy

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9.9% of the segmentation share, and the remaining 4.3% pertains to other miscellaneous aspects not previously mentioned (Amir, 2019).

Market Analysis Customers While Popeyes strives to bring their delicious food to everyone, no matter their age, gender, ethnicity, socioeconomic status, or any other differentiator, Popeyes does have a target demographic. We have seen that Popeyes’ consumers around the globe are incredibly tech-savvy and rely on the internet for news and updates, and they often fall between the ages of 25-49 years old, making them members of the X and Y generations. With over 26,000 college students living in Norman during the school year (IRR Data Center), Popeye’s general target market reflects the same target market that the franchise would attract here in Norman.

Needs of Market The key characteristics and needs of target market are as follows:

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Generation X - OU Students ● Characteristics ○ Average monthly budget (Food), $200.00 ○ Single ○ Tend to eat out more, cook less ○ Busy lifestyle ● Needs ○ Inexpensive food ○ Easy access ○ Fast service ○ Quality food Generation Y ● Characteristics ○ Spouse and/or children ○ Annual Salary range of $25,827 to $95,219 ○ Median Household Income of $53,733 ○ Very busy lifestyle ● Needs ○ Affordable ○ On the go and take home ○ Pleasant environment ○ Quality Food

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Competition With four main companies dominating the fried chicken industry, Popeyes faces steep competition from three other major competitors- Chick-fil-a, Kentucky Fried Chicken, and Zaxby’s. All three of these exist in Norman, in addition to a variety of other fast-food chicken chains. With an emphasis on cajun-style cooking, efficient and quick food preparation, and a convenient location, Popeyes aims to differentiate itself from competitors in Norman.

Location ● 3045 Classen Blvd Suite F Norman, OK 73072

● Square Feet: 1,500 sq. ft ● Rate: $17.00/sq. ft/yr ● Term: 5 years ● Total Cost/Yr: $25,500/Yr Built in 2006, 3045 Classen Blvd Suite F was chosen based on its fast growing retail area and its inexpensive leasing cost. Earlier in the year there was a Starbucks and a Panda Express opened

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across from this location and has succeeded in bringing more foot traffic to this area. There is also new construction of an OnCue and Wendy’s about a half mile down the street taking place now. This location is encircled by large student and non student living apartments, new homes, and a numerous amount of growing businesses. By being located off of Hwy 9 and Hwy 77, this location is only 1 mile from the University of Oklahoma campus and on the one side of Hwy 9 that does not have a chicken shop.

Projected Market Share The Norman Popeyes location predicts to gain a 1.9% market share of the fast food chicken industry in Norman after one year of operations. We expect this location’s Total Expected Sales will be $300,833.33 per year. This number was calculated by taking Total Revenue for all locations of $108,300,000 and dividing it by the amount of locations currently in operation, 360.

We are left to believe the expected Total Sales for Norman will be $300,833.33.

According to a report from IBISWorld, the city of Norman brings in approximately $15,833,334 of total annual sales from fast food chicken restaurants. By dividing the total expected sales by the total annual sales for fast food chicken restaurants in Norman, the initial market share for Popeyes will be 1.9%. We expect to see a rise in market share to reach a 10.8% to truly reflect the industry across the USA. Out of these sales, it is expected that 55% will come from Generation X, 35% from Generation Y, and about 10% from other generations of consumers.

This leads to approximately 1.05% of the total market share being from Generation X, .67% from Generation Y, and the final .2% from other age ranges.

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Management Team and Human Resources Background and Roles of Key Individuals *All managers must complete the Popeyes Training Program to qualify as a manager.

General Manager: Jayla Hurd Must remain active in overseeing the operations of the Restaurant, including regular, periodic visits to the Restaurant to ensure that the Restaurant’s operations comply with our operating standards. Ms. Hurd was the general manager of many retail stores for over a decade. She will bring in the experience of managing a large number of individuals and others reporting to her.

She also has a strong background in accounting and sales. The following displays required trainings of the general manager, specified by the Popeyes franchise in the FDD.

Shift Manager 1: Megan Ivy Ms. Ivy will be responsible for managing the team members. She will make sure the procedures and rules of the company are being carried out by each team member. Ivy has a strong background in international business studies and accounting. The following displays required

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trainings of this specific shift manager, specified by the Popeyes franchise in the FDD.

Shift Manager 2: Sydney Smith Ms. Smith will be in charge of making sure production is flowing and up to date. She will be making sure products are being ordered, inventory is handled, and sales are being made. Smith has worked in marketing for other industries such as retail, health, and is now taking a venture into the food service industry. The following displays required trainings of this specific shift manager, specified by the Popeyes franchise in the FDD.

Shift Manager 3: Alexis Downs Mrs. Downs will be responsible for making sure everything comes together. She will be in

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charge of making hiring/firing and making the schedule. Downs has experience in teaching and sales. The following displays required trainings of this specific shift manager, specified by the Popeyes franchise in the FDD.

Investors - Jayla Hurd, Megan Ivy, and Sydney Smith Used funds from multi-billionaire uncle’s trust and their past investments.

Day to Day Operation Activities Marketing and Advertising (including the grand opening and systematic promotions) With a $20,000 marketing budget per year, Popeyes will allocate the budget to social media marketing, partnerships, print marketing, and the grand opening. The grand opening marketing and advertising will be a one time cost, so in the following years the total $20,000 budget will be allocated to three main marketing platforms. On occasion, Popeyes may use excess amount to promote one-time/seasonal deals and promotions.

For the grand opening the most important promotion will allow the first 100 customers to receive a free meal up to a $10.50 value. In addition to that, we will also use our social media

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marketing to reach the target market through Facebook, Twitter, and Instagram ads. This location will create accounts on all platforms and follow as many people with our predicted customer needs and characteristics to ensure exposure of new location. Banners will be placed around town to increase exposure of the grand opening and 100 free meals promotion. A grand opening banner will be purchased to place outside the establishment as well.

In order to compete in such a strongly competitive market, Popeyes will focus on connecting with the community of Norman and its plethora of OU students. A connection with the University of Oklahoma will be very beneficial to our exposure and market share rate. By connecting with the local university, Popeyes can coordinate to work events and possibly put on our own sample table events. Popeyes will hope to sponsor fundraiser/benefit nights for organizations around Norman.

Production Shift manager Downs will be in charge of making sure the shifts from open to close are filled and accounted for. The daily production team will consist of at least one shift manager and 8 crew members per shift. Crew members include cooks.

Popeyes hours of operation will be as follows: Sunday - 10:30 A.M. - 10:00 P.M. Monday - 10:30 A.M. - 11:00 P.M. Tuesday - 10:30 A.M. - 11:00 P.M. Wednesday - 10:30 A.M. - 11:00 P.M. Thursday - 10:30 A.M. - 11:00 P.M. Friday - 10:30 A.M. - 12:00 A.M. Saturday - 10:30 A.M. - 12:00 A.M. 27

Hours may be subject to change due to holidays, events, etc. Hours can also be changed due to managers discretion.

Personnel, including hiring strategies ● Candidate must apply online or in-store. ● Candidate will be selected for first round interview (single interview) ● Candidate will be welcomed back for second round interview (group interview at the end hiring process) Popeyes ideal employee possess willingness to be managed, great customer skills, and is capable of taking initiative when needed. The hiring process will take no longer than two weeks.

Manager Downs will inform new employees of hire the following Sunday after the group interview. Employment will start upon soonest possible start date.

The Norman location of Popeyes will have to hire: ● 1 General Manager ● 3 Shift Managers ● 5 Cooks ● 16 Crew Members At all times there has to be a manager on site and at least two cooks per shift. The general manager will be in charge of making sure the location operating accordingly to the standards of the franchisor. The shift managers will be responsible for production, management, and scheduling. The cooks will be in charge of the grilling and cooking demands of the customers.

Crew members will carry out the daily tasks needed of the managers and customers to ensure a smooth operation.

Customer Service Protocols Customer Service is the top priority of the Norman Popeyes team, and therefore, the customers of Popeyes will always be right. Popeyes will have a 100% satisfaction guarantee by catering to the customer’s every appropriate need. If any customer is dissatisfied with their meal, they will either be refunded and/or discounts will be given for their next visit.

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Administrative The shift manager Smith will handle the ordering of food from distributors and all other supplies. Smith’s duties will help implement the franchisor’s standards and ways within our company. Manager Ivy will help will managing payroll and overseeing the duties of Smith. Manager Downs will be in charge of making the schedule in a timely manner.

Bookkeeping Popeyes will hire Ascension CPA to manage all bookkeeping. Ascension CPA is located in Oklahoma City, Oklahoma. Popeyes may benefit from the CPA being within such a close distance. All financial statements and taxes will be performed by Ascension CPA.

Legal form of Business (LLC, Corporation, etc.)

This Popeyes location will operate as a limited liability company. For obvious reasons, like tax reporting and liability coverage, LLC is the most beneficial option for this particular franchise. Popeyes will benefit from being an LLC by having the legal protections, while also having slightly less restrictions and taxation than a corporation.

Cash Flow, Income Statement, and Balance Sheet Note: The most recent available financial statements are from 2016. The SEC does not offer data more recent than this. This is due to the fact that Restaurant Brands International purchased Popeyes Louisiana Kitchen in February of 2017 (Caplinger, 2017).

Breakeven will be reached once sales meet $1,409,000, plus the expenses associated with employee payment and taxes (over $375,000 per year). If profit is at least our estimated $300,833 per year, then break-even will not be reached until nearly 6 years into operations.

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Corporate Statement of Cash Flows

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Corporate Income Statement

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Corporate Balance Sheet

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Funds Required/Used Prior to Opening According to www.franchise.com, the minimum amount to invest into opening a Popeyes restaurant is going to range from around $1,383,500 to $3,620,800. â—? $1,000,000 in liquid assets â—? Additional Start-Up Fees $383,500 to $2,620,800 Fees may vary upon number of opening locations under franchisee and duration of franchise agreement term. Due to only wanting to open one location in Norman, the investors of the Norman Popeyes franchise only are required to provide a minimum of $383,500 + $25,500 (real estate cost) + 1,000,000 (liquid assets of investors) = $1,409,000 in funds prior to opening.

Other fees may apply. See below.

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The group of investors were left an inheritance fund of $3,500,000 from a multi-millionaire uncle. The inheritance funds will provide the majority of the initial costs. In addition, the individual investors will split the excess amount of capital needed.

The uses of these funds prior to opening are as follows: 1. Initial Real Estate Payment 2. Advertising/Marketing

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3. Hiring/Training 4. Equipment/Supplies

Funds Required/Used After Opening

The main source of funds that will be required to cover post costs will come from the sales of operation. The estimated sales should be approximately $300,833.33. Popeyes of Norman will

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be able to cover all expenses and additional costs that may arise with the predicted annual amount. If sales are not met, Popeyes of Norman investors will be responsible for those additional costs.

The uses of these funds post opening are as follows: 1. Cover Expenses 2. Additional Hiring/Training 3. Additional Improvements

Critical Risks A business may be threatened by a variety of risks in its environment, including both internal and external factors, which can be somewhat controllable or, more often, completely uncontrollable.

These include both internal operations and constituent relationships, which have manageable uncertainty. Additionally, there are risks in the microenvironment. These are marketplace risks that are influenced by the needs and expectations of Popeyes’ target market. These forces have influenceable uncertainty.

External Factors The following are possible external risks that the Norman Popeyes franchise may endure: ● Threat of severe weather (hail, tornadoes, extreme icy conditions) ○ Medium risk ○ Cost of risk: $236,250 ■ 15% x 90% x $1,330,833 = $236,250 ■ The value of $1,330,833 was found by taking the initial capital required for a Popeyes franchise ($1,000,000) and adding it to the average amount of revenue a Popeyes franchise makes in a year ($1,330,833). ○ Strategy: share ● Threat of robbery ○ Low risk ○ Cost of risk: $11,281.24 ■ 5% x 75% x $300,833 = $11,281.24 36

■ $300,833 was found by taking the revenue from all Popeyes franchises from 2016 ($108,300,000) and dividing it by the total number of Popeyes franchises (360). ○ Strategy: Mitigation and transference ■ We would mitigate the issue by implementing an alarm system and security cameras. We would advertise on the doors and windows that we are protected by an alarm company to ensure customers that they are safe and to deter potential criminals. In the event that the Norman Popeyes location is robbed, the burden would be transferred or shared with corporate. ● Issue(s) delay construction ○ Medium risk ○ Risk delay: 32.94 days ■ 30% x 90% x 122 days = 32.94 days ■ 122 days was found by taking the average amount of time it takes to build a restaurant (4 months, converted to 122 days). ○ Strategy: acceptance ■ Though unideal, there are many different factors that can affect the timeline of construction. If we run into this issue, it is one we will have to accept and work around once the restaurant opens.

Internal Operations The following are possible internal risks that the Norman Popeyes franchise may endure: ● Poor employee work ethic ○ High risk ○ Risk delay: 18.9 days ■ 50% x 90% x 42 days = 18.9 days ■ 42 days is the number of training days allotted for employees ○ Strategy: mitigate and avoid ● Location choice of franchise is not approved by corporate ○ Medium risk 37

○ Risk delay: 32.94 days ■ 30% x 45% x 122 days = 32.94 days ■ 122 days was found by taking the average amount of time it takes to build a restaurant (4 months, converted to 122 days). ○ Strategy: mitigate ■ We would mitigate this situation by remaining in close contact with corporate to ensure a proper location can be agreed upon as quickly as possible.

Constituent Relationships The following are possible risks with regard to constituent relationships that the Norman Popeyes franchise may endure: ● Management unable to follow franchise rules ○ Medium risk ○ Cost of risk: $54,142 ■ 20% x 90% x $300,833 ■ $300,833 was found by taking the revenue from all Popeyes franchises from 2016 ($108,300,000) and dividing it by the total number of Popeyes franchises (360). ○ Strategy: avoid ● Legal misunderstandings (between landlord and franchisee) ○ Medium risk ○ Cost of risk: $308,947.84 ■ 25% x 95% x $1,300,833 = $308,947.84 ■ $300,833 was found by taking the revenue from all Popeyes franchises from 2016 ($108,300,000) and dividing it by the total number of Popeyes franchises (360). $1,000,000 is the initial capital investment to build a Popeyes location.

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Marketplace The following are possible marketplace risks that the Norman Popeyes franchise may endure: ● Customer service complaints ○ High risk ■ 93% of consumers base their purchases off of reviews (Kaemingk, 2019). ○ Cost of risk: $286,875 ■ 85% x 45% x $750,000 = $286,875 ○ Strategy: mitigate and avoid ● Complaints to the Better Business Bureau ○ Medium risk ○ Cost of risk: $54,149.94 ■ 30% x 60% x $300,833 = $54,149.94 ■ $300,833 was found by taking the revenue from all Popeyes franchises from 2016 ($108,300,000) and dividing it by the total number of Popeyes franchises (360). ○ Strategy: mitigate ■ We would mitigate this issue through adequate training of Popeyes employees. ● Loss of demand ○ Medium risk ○ Cost of risk: $48,133.28 ■ 20% x 80% x $300,833 = $48,133.28 ■ $300,833 was found by taking the revenue from all Popeyes franchises from 2016 ($108,300,000) and dividing it by the total number of Popeyes franchises (360). ○ Strategy: Mitigate ■ We would attempt to mitigate the likelihood of demand decreasing through the use of advertisements and continually managing consumer trends. ● Inability to keep pace with demand ○ Low risk 39

○ Cost of risk: $22,562.48 ■ 10% x 75% x $300,833 = $22,562.48 ■ $300,833 was found by taking the revenue from all Popeyes franchises from 2016 ($108,300,000) and dividing it by the total number of Popeyes franchises (360). ○ Strategy: Avoid ■ We would avoid the occurrence of this risk by continually managing consumer trends in order to anticipate trends in demand to plan accordingly.

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