Explanation

The system is mature and very large, with over 3,000 franchised outlets in the U.S. While Item 20 shows continued growth with 136 new franchised outlets opened in 2024, this does not appear to be at a pace that would strain the resources of a franchisor of this size and experience. The risk of support dilution due to excessively rapid expansion appears low for this system.

Potential Mitigations

• Discuss the quality and responsiveness of franchisor support with a range of existing franchisees, from new to established, with help from a business advisor.
• Confirm with your accountant that the franchisor's financial statements in Item 21 reflect sufficient investment in franchisee support services.
• Your attorney can review the franchisor's contractual support obligations outlined in Item 11 to ensure they are clearly defined.

Explanation

This risk was not identified. Popeyes is a very large, well-established franchise system that has been in operation since 1972 and franchising since 1976. The management team disclosed in Item 2 has extensive experience in the restaurant and franchise industries. The system is mature and has a substantial operating history, indicating it is not a new or unproven concept.

Potential Mitigations

• A business advisor can help you review the Item 2 disclosures to understand the specific experience of the key executives managing the brand.
• An accountant can analyze the historical data in Item 20 to confirm the system's stability and long-term presence in the market.
• It is still prudent to have your attorney review the entirety of the FDD, as even mature systems can present risks.

Explanation

This risk was not identified. The Popeyes brand and its core product, fried chicken, have demonstrated decades of sustained consumer demand. The franchisor is a major, established player in the quick-service restaurant industry. This is not a business model based on a fleeting trend or fad.

Potential Mitigations

• Your business advisor can still help you research local market competition and long-term consumer trends for quick-service chicken restaurants.
• Assess the franchisor's commitment to innovation and brand evolution by reviewing Item 11 for details on research and development.
• A financial advisor can assist you in evaluating the brand's resilience to economic shifts and changing consumer tastes.

Explanation

This risk was not identified. Item 2 discloses an extensive management team with significant prior experience at Popeyes, its parent company RBI, or other major companies in the quick-service restaurant and franchising industries (e.g., PepsiCo, Chick-fil-A, Little Caesars). The executive team appears to have substantial and relevant experience.

Potential Mitigations

• A business advisor can help you review the specific roles and tenures of the key executives listed in Item 2 to gauge team stability.
• Discuss the quality and effectiveness of the management team's support with current franchisees.
• It is still advisable to have your attorney review the entire FDD, as even experienced management can implement challenging policies.

Explanation

This risk was not identified. The FDD discloses that Popeyes is an indirect subsidiary of Restaurant Brands International Inc. (RBI) and Restaurant Brands International Limited Partnership (RBILP). Crucially, the FDD provides audited financial statements for both of these parent/guarantor entities in Exhibit L, giving you a basis to assess their financial condition.

Potential Mitigations

• Your accountant should still carefully review the provided parent company financial statements and the accompanying guarantee of performance.
• It is wise to have your attorney confirm the legal relationship between the franchisor and the parent entities providing the financial backing.
• Even with parent disclosures, a business advisor can help you evaluate the overall financial health of the entire corporate family.

Explanation

This risk was not identified. Item 1 discloses the franchisor's history, including a name change from AFC Enterprises, Inc. in 2014 and its acquisition by Orange, Inc. (an RBI entity) in 2017. The document appears to provide the required historical context and does not indicate any attempt to obscure a problematic history through corporate restructuring.

Potential Mitigations

• Your attorney should review the corporate history in Item 1 to ensure a clear lineage of the brand is presented.
• A business advisor can help you perform independent research on the brand's history under its prior names for additional context.
• Ask long-term franchisees about their experiences under the previous ownership structures.