Racing towards the future
We're good to grow
At Popeyes®, we're building on the momentum of 2005 and 2006. In addition to strengthening our franchisee economic model, we also made improvements to our supply chain management system. The result: higher quality, fresher products delivered to our restaurants.
Popeyes franchisees are good to grow, too. And there's plenty of room to accommodate them, especially in our under-penetrated existing markets, both domestically and internationally. That expansion is already underway. We opened 142 new restaurants in 2006, a 15.4 percent increase over 2005, and many of them were higher volume restaurants. We've also closed some underperforming locations. On top of that, we've expanded our range of building types and operating systems. Put simply, now there's a Popeyes facility design for just about every venue.
Putting operations in the driver's seat
In the QSR industry, no matter how good your food and service are, the customer's opinion is the only one that counts. So, in 2006, we focused on enhancing the guest experience in our restaurants. Naturally, operators were critical to the success of that initiative. So much so, that we named 2006 "The Year of the Operator." Through special system-wide initiatives, such as an operations knowledge competition called the Popeyes Bowl and the annual Popeyes Operations Meeting, we strengthened our teamwork with our franchisees. Through these initiatives, we helped operators improve their system knowledge and execution. Just as importantly, we reinforced the need for consistent national quality standards and system-wide testing throughout the year. Working as a team, we also developed more efficient kitchen, food preparation and delivery processes — helping to ensure that Popeyes guests enjoy their favorite menu selections hot, fresh and flavorful.
Moving out in front
As a QSR concept, Popeyes breaks away from the pack. Today, we are using our flavor difference to strengthen our advertising. Our new broadcast campaign focuses on the quality and uniqueness of Popeyes flavorful food as well as our brand's New Orleans culinary heritage, something no other restaurant chain in the segment can claim. Building on the Popeyes "Big Flava™" platform, we launched our "Food with 'Tude™" advertising campaign emphasizing Popeyes spicy flavor profile. Together, the two messages are intended to drive more traffic into our restaurants.
Adding more to our brand
In the spirit of Lagniappe, Popeyes is exploring and testing new ways of bringing a little something extra to our guests. From our "menu of venues" to our new Popeyes® Louisiana Kitchen test concept, we are keeping our eye on the horizon, focusing on the Popeyes of tomorrow.
Popeyes "menu of venues" is a critical component of our strategy to ensure continued growth of the brand domestically and internationally. We provide our franchisees with the options and flexibility to develop different types of restaurants for different locations. The traditional freestanding Popeyes restaurant is now available in 28-seat, 48-seat and 66-seat configurations. In addition to the traditional freestanding Popeyes restaurant, franchisees can open smaller walk-up locations which are ideal for urban settings, or they can develop in-line formats for a strip mall.
In addition to venue alternatives, we are also exploring new formats for delivering the flavor our customers crave. This exploration includes a limited menu approach designed to give our customers our world-famous chicken and biscuits faster than ever before!
Popeyes® Louisiana Kitchen, a fast-casual hybrid concept, is another option we are exploring. Serving as a research and development platform, the restaurant provides opportunities to test variations of Cajun cuisine with our customers, as well as to experiment with new restaurant technologies, alternative service systems, marketing approaches, and menu items that have application in our Popeyes restaurants. The concept also offers an array of convenient ordering options including front counter, drive-thru, a self-serve kiosk inside the restaurant, and call ahead service for car-side "To Geaux" pick-up. A Popeyes® Louisiana Kitchen test unit opened on December 12, 2006, in Norcross, Georgia.
As we continue to test venues, menus and technology, we are gaining valuable insights that will ultimately help the Popeyes system overall and provide a unique glimpse into the potential future of Popeyes.