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Just nine days after the announcement that Restaurant Brands International bought Popeyes Louisiana Kitchen Inc. (NASDAQ: PLKI), Popeyes today announced that CEO Cheryl Bachelder will step down at the close of the acquisition, which is expected in early April. A new Popeyes chief executive will be named then.
"This turnover was of no surprise," says John Gordon, principal of San Diego-based Pacific Management Consulting Group. Gordon should know. On the day the acquisition was announced, February 21, the restaurant unit analyst predicted for the record that Bachelder would soon be leaving the firm. Gordon expects outgoing Bachelder and her extraordinary collaborative management skills to be in high demand with franchising systems in need of an uplift. Gordon points to Bachelder's formula for success that competitors seem to struggle with: "Focusing early on who was the customer—the franchisee—and determining what moved the business, she broke the code and operated in a hands-on way."
Bachelder joined Popeyes in 2006 as a member of its board of directors. In November 2007 she was named CEO. At the time she took the helm Popeyes same-restaurant sales had dropped by 2.3 percent for 2007. The number of new store openings had sagged from the year before.
In the 2007 annual report, her first as CEO, she laid out a plan to turn around the brand. The report stressed to shareholders the importance of franchisees in moving the franchising company ahead. In its section on the need to strengthen restaurant unit economics, not just company-owned stores, it featured a picture of Lal Sultanzada, Popeyes' franchisee of the year for 2007. "Popeyes franchise owners are the foundation upon which we will accelerate growth of the Popeyes brand," declared the report. Bachelder summarized this franchisee-centric approach in the last lines of her letter to shareholders: "Together with our franchise owners, we intend to make you a proud investor in our brand Popeyes."
Bachelder simultaneously set out to change Popeyes brand name in 2008, transforming it from Popeyes Chicken and Biscuits to Popeyes Louisiana Kitchen. Its corporate name, then AFC Enterprise, followed in 2014 when it became Popeyes Louisiana Kitchen Inc. with the new ticker symbol PLKI.
Her marketing acumen was right on target. Instead of a brand associated with spinach-eating Popeye the Sailor Man, a marketing attempt from years earlier that left the brand floundering, or even with its namesake detective Jimmy "Popeye" Doyle from the French Connection movie, Bachelder transformed the brand to a strong icon of Louisiana-inspired cuisine. She felt food had to be center stage of the brand upgrade. "Annie" from Louisiana was moved from a local TV spot to a national campaign. Annie became the brand's spokeswoman.
The national rebranding of Popeyes was complete.
"Cheryl's collaborative and engaging approach to the business has driven a decade of success for the Popeyes brand and enabled the company to achieve outstanding results, putting Popeyes at the top of the quick-service restaurant industry," said John Cranor, chairman of the Popeyes board of directors.
The franchisor flourished as its franchisees prospered. The company reports that restaurant unit revenues in its system rose 45 percent from 2007 levels while bottom line restaurant operating profits have more than doubled. The chain's outlets carefully grew from 1,900 at the end of 2007 to today's nearly 2,700 restaurants worldwide.
The Popeyes system has now had eight consecutive years of positive same-store sales growth. It has seen strong improvements in net income and shareholder value.
"Cheryl created a collaborative culture among franchisees and the restaurant support team. It's been a true partnership that turned out to be the secret to success for Popeyes," said Howard Mangen, president of the Popeyes International Franchisee Association. "Her leadership approach was a welcome one and led to an exciting and profitable ten years for the Popeyes Brand."