POPEYES LOUISIANA KITCHEN: Company puts renewed emphasis on customer service

When Cheryl Bachelder took over as AFC Enterprises CEO last fall, she quickly saw the major draw of the company’s Popeyes restaurants.

The stores spend hours marinating the chicken and stewing the red beans and rice to pack in flavor.

“The treasure of this brand is that slow-prepared food that only grandma herself would take the time to make today,” said Bachelder, a former KFC and Domino’s Pizza executive.

Unfortunately, the chain wasn’t known for delivering its chicken with the urgency required in the fast-food business, she said.

“The corresponding challenge is that we never put as much emphasis on running a great fast-food restaurant system,” Bachelder said. “We would like for our service, our guest experience, to be as sharp as our food.”

Atlanta-based AFC, parent company of Popeyes, is in the early stages of a plan designed to emphasize its strengths and shore up its weaknesses. It rolled out this year a marketing campaign that focuses on its Louisiana culinary heritage, expanded the menu and started a program to get customer feedback for stores.

The stores are being rebranded as Popeyes Louisiana Kitchen, instead of Popeyes Chicken and Biscuits, to reflect the emphasis on the company’s Louisiana roots. The chain was started in New Orleans before moving to Atlanta in 1992.

Popeyes has its challenges. AFC stock was trading this week at less than $4 a share, losing more than half its value since the beginning of the year.

AFC revenues rose 2 percent to $131 million through the first three quarters of the year, but net income fell 13 percent to $17 million. Domestic same-store sales are down 2.1 percent.

Popeyes’ new plan has it moving in the right direction, Bachelder said. Almost all restaurants now include on receipts a toll-free number that customers can call to rate their experience.

The system tracks 10 attributes, including food quality, speed of service, hospitality, accuracy of order and cleanliness.

“The honesty and immediacy of that feedback is helping our restaurant managers continuously improve,” Bachelder said.

Popeyes also added this year seven products, including nuggets, tenders, wraps, sandwiches and bowls, to its permanent menu. The traditional bone-in chicken —- thighs, drumsticks, breasts and wings —- is a Popeyes mainstay, but the company needed to expand the menu, Bachelder said.

The new items should help it attract more lunch traffic and also fend off McDonald’s and Burger King, which are putting more emphasis on chicken, she said.

“I worry as much about the burger chains as I do KFC,” Bachelder said. “McDonald’s has been focused on the Southern-style chicken sandwich since the Olympics.”

Popeyes has made some adjustment because of the economic downturn, Bachelder said. The restaurants, for example, aren’t moving aggressively to put up signs with the new logo and name, Popeyes Louisiana Kitchen. Instead, the goal is to build sales inside the stores and then start making cosmetic changes, she said.

“We’ve had to be more focused, but I actually think that’s been a blessing,” Bachelder said. “We’re going to get the fundamentals of our business moving the right way.”

In many ways, the changes are coming at just the right time, she said. Popeyes can offer more meal options at an affordable price. A Big Easy chicken sandwich or bowl can be paired with a drink for about $5. “I think those right now are the Holy Grail until the economy starts to bounce back,” she said.

> Owner: AFC Enterprises

> Founded: 1972

> Stores: 1,905

> Background: Started by Al Copeland in a New Orleans suburb, Popeyes was bought in 1992 by Atlanta-based America’s Favorite Chicken Co., now named AFC Enterprises. In 2003 and 2004, AFC sold Seattle’s Best Coffee, Cinnabon and Church’s Chicken to focus on Popeyes.

TRADITIONAL CHICKEN CHAINS

Systemwide U.S. sales in 2007* include:

KFC……..$5.15 billion

Popeyes….$1.58 billion

Church’s ..$813 million

Source: Technomic

*Chick-fil-A, which specializes in chicken sandwiches, had $2.64 billion in sales.