Recipe for Profits

Popeyes Louisiana Kitchen CFO Mel Hope talks about collaborating with franchisees to grow the business.
Marielle SegarraAugust 1, 2012

Name: Mel Hope
Position: CFO of Popeyes Louisiana Kitchen
Previous Positions: SVP of finance and chief accounting officer of AFC Enterprises, the parent company of Popeyes; CFO of First Cambridge HCI Acquisitions, a real estate investment firm in Alabama; accounting, auditing, and business advisory professional for PwC.
Notable For: Being finance chief of the world’s second-largest fast-food fried-chicken chain. Popeyes has more than 2,000 restaurants in 45 states and 25 other countries.

His Take-Away: The Popeyes system is about 98% franchised. We have to be attentive to our franchisees and their needs in order for the whole company to thrive. We make money by capturing a royalty from their revenues. Some companies might simply drive revenues by doing a lot of low-price offerings that don’t make a lot of money for the franchisees. But that works against you in time. You might get a temporary bump by running a deeply discounted promotion, but it would cost you a lot in terms of your credibility with your franchisees, and you certainly wouldn’t be able to sustain it as a business model. So we’ve focused on making our franchisees more profitable. We started analyzing their P&Ls and picking out areas where they could do better on electricity, food, and labor costs. We’ve stripped out about $32 million to $34 million of costs over the last two to three years. Saving our franchisees that money is a good expression of our commitment to a partnership.

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