Popeyes Louisiana Kitchen (PLKI) 10-Q 12 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Oct. 04, 2015	Oct. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	POPEYES LOUISIANA KITCHEN, INC.
Entity Central Index Key	1,041,379
Current Fiscal Year End Date	--12-27
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Oct. 4, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		22,472,438

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions	Oct. 04, 2015	Dec. 28, 2014
Current assets:
Cash and cash equivalents	$ 7.9	$ 8.4
Accounts and current notes receivable, net	8.8	8.6
Other current assets	5.5	7.4
Advertising cooperative assets, restricted	40.1	32.4
Total current assets	62.3	56.8
Long-term assets:
Property and equipment, net	98.3	95.7
Goodwill	11.1	11.1
Trademarks and other intangible assets, net	94.3	94.7
Other long-term assets, net	1.6	2
Total long-term assets	205.3	203.5
Total assets	267.6	260.3
Current liabilities:
Accounts payable	5.8	7.4
Other current liabilities	11.7	12.4
Current debt maturities	0.3	0.3
Advertising cooperative liabilities	40.1	32.4
Total current liabilities	57.9	52.5
Long-term liabilities:
Long-term debt	109.4	109.6
Deferred credits and other long-term liabilities	37.6	32.4
Total long-term liabilities	$ 147	$ 142
Commitments and contingencies
Shareholders’ equity:
Preferred stock ($.01 par value; 2,500,000 shares authorized; 0 shares issued and outstanding)	$ 0	$ 0
Common stock ($.01 par value; 150,000,000 shares authorized; 22,648,070 and 23,143,609 shares issued and outstanding at October 4, 2015 and December 28, 2014, respectively)	0.2	0.2
Capital in excess of par value	9.3	46.4
Accumulated earnings	53.8	19.3
Accumulated other comprehensive loss	(0.6)	(0.1)
Total shareholders’ equity	62.7	65.8
Total liabilities and shareholders’ equity	$ 267.6	$ 260.3

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Oct. 04, 2015	Dec. 28, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,500,000	2,500,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	22,648,070	23,143,609
Common stock, shares outstanding (in shares)	22,648,070	23,143,609

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Revenues:
Sales by Company-operated restaurants	$ 25.4	$ 22.5	$ 85.2	$ 74.2
Franchise royalties and fees	34.5	30.9	110.6	99.7
Rent from franchised restaurants	1.2	1.5	4.2	4.8
Total revenues	61.1	54.9	200	178.7
Expenses:
Restaurant food, beverages and packaging	8.2	7.5	27.6	24.4
Restaurant employee, occupancy and other expenses	12.3	10.6	40.3	35.2
General and administrative expenses	19.6	17.1	63.9	58.9
Occupancy expenses - franchise restaurants	0.7	0.7	2.3	2.3
Depreciation and amortization	2.3	2.1	7.5	6.7
Other expenses (income), net	0.1	0.2	(0.1)	1.7
Total expenses	43.2	38.2	141.5	129.2
Operating profit	17.9	16.7	58.5	49.5
Interest expense, net	0.9	0.8	2.8	2.4
Income before income taxes	17	15.9	55.7	47.1
Income tax expense	6.4	6.1	21.2	17.9
Net income	$ 10.6	$ 9.8	$ 34.5	$ 29.2
Earnings per common share, basic (in dollars per share)	$ 0.47	$ 0.42	$ 1.51	$ 1.25
Earnings per common share, diluted (in dollars per share)	$ 0.46	$ 0.42	$ 1.49	$ 1.23
Weighted-average shares outstanding:
Basic (in shares)	22.6	23.2	22.8	23.4
Diluted (in shares)	22.8	23.5	23.1	23.8

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 10.6	$ 9.8	$ 34.5	$ 29.2
Other comprehensive income
Net change in fair value of cash flow hedge	(0.6)	0	(1.1)	0
Reclassification adjustments for derivative losses included in earnings	0.1	0.2	0.2	0.6
Other comprehensive income (loss), before income taxes	(0.5)	0.2	(0.9)	0.6
Income tax(benefit) on other comprehensive income (loss)	0.3	(0.1)	0.4	(0.2)
Other comprehensive income (loss), net of income taxes	(0.2)	0.1	(0.5)	0.4
Comprehensive income	$ 10.4	$ 9.9	$ 34	$ 29.6

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited) - 9 months ended Oct. 04, 2015 - USD ($) $ in Millions	Total	Common Stock	Capital in Excess of Par	Accumulated Earnings	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 28, 2014	$ 65.8	$ 0.2	$ 46.4	$ 19.3	$ (0.1)
Beginning balance (in shares) at Dec. 28, 2014		23,143,609
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	34.5			34.5
Other comprehensive income, net of income tax	(0.5)				(0.5)
Repurchases and retirement of shares	(45)		(45)
Repurchases and retirement of shares (in shares)		(783,627)
Issuance of common stock under stock option plan	1		1
Issuance of common stock under stock option plan (in shares)		169,724
Issuance of restricted stock awards, net of forfeitures	(5)		(5)
Issuance of restricted stock awards, net of forfeitures (in shares)		118,364
Excess tax benefits from stock-based compensation	6.8		6.8
Stock-based compensation expense	5.1		5.1
Ending balance at Oct. 04, 2015	$ 62.7	$ 0.2	$ 9.3	$ 53.8	$ (0.6)
Ending balance (in shares) at Oct. 04, 2015		22,648,070

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions	9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014
Cash flows provided by (used in) operating activities:
Net income	$ 34.5	$ 29.2
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	7.5	6.7
Net (gain) loss on sale and disposal of assets	(0.1)	0.1
Deferred income taxes	1.9	(0.1)
Non-cash interest expense, net	0.4	0.9
Provision for credit losses	0.1	0
Excess tax benefits from stock-based payment arrangements	(6.8)	(1.7)
Stock-based compensation expense	5.1	3.6
Change in operating assets and liabilities:
Accounts receivable	(0.2)	0.7
Other operating assets	8.8	7.9
Accounts payable and other operating liabilities	(3)	(1.3)
Net cash provided by operating activities	48.2	46
Cash flows provided by (used in) investing activities:
Capital expenditures	(11.2)	(19.4)
Purchase of recipes and formulas	0	(41.8)
Proceeds from dispositions of property and equipment	0.1	0
Net cash used in investing activities	(11.1)	(61.2)
Cash flows provided by (used in) financing activities:
Borrowings under 2013 credit facility	0	43
Share repurchases	(45)	(30)
Proceeds from exercise of employee stock options	1	1.5
Excess tax benefits from stock-based payment arrangements	6.8	1.7
Other financing activities, net	(0.4)	(0.4)
Net cash provided by (used in) financing activities	(37.6)	15.8
Net increase (decrease) in cash and cash equivalents	(0.5)	0.6
Cash and cash equivalents at beginning of year	8.4	9.6
Cash and cash equivalents at end of quarter	$ 7.9	$ 10.2

Description of Business

Description of Business	9 Months Ended
	Oct. 04, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Popeyes Louisiana Kitchen, Inc. (“PLKI” or the “Company”) develops, operates and franchises quick-service restaurants under the trade names Popeyes ® Louisiana Kitchen and Popeyes ® Chicken & Biscuits (collectively “Popeyes”) in 48 states, the District of Columbia, three territories, and 27 foreign countries.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Oct. 04, 2015
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies The Company’s significant accounting policies are presented in Note 2 to the Company’s consolidated financial statements for the fiscal year ended December 28, 2014 , which are contained in the Company’s 2014 Annual Report on Form 10-K (“the 2014 Form 10-K”). The significant accounting policies that are most critical and aid in fully understanding and evaluating the reported financial results include the following: Basis of Presentation. The accompanying condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, certain information required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements is not included. The Consolidated Balance Sheet data as of December 28, 2014 that is presented herein was derived from the Company’s audited consolidated financial statements for the fiscal year then ended. The condensed consolidated financial statements as of October 4, 2015 , have not been audited by the Company’s independent registered public accountants, but in the opinion of management, they contain all normal recurring adjustments necessary for a fair statement of the Company’s financial condition and results of operations for the interim periods presented. Interim period operating results are not necessarily indicative of the results expected for the full fiscal year. The Company suggests that the accompanying financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2014 Form 10-K. Except as disclosed herein, there has been no material change in the information disclosed in the notes to our consolidated financial statements included in the 2014 Form 10-K. Use of Estimates . The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates affect the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition — Franchise Operations. Revenues from franchising activities include development fees associated with a franchisee’s planned development of a specified number of restaurants within a defined geographic territory, franchise fees associated with the opening of new restaurants, renewal fees associated with the renewal of franchise agreements, transfer fees for the transfer of a restaurant to another entity, and ongoing royalty fees which are generally based on five percent of net restaurant sales. Development fees and franchise fees are recorded as deferred franchise revenue when received and are recognized as revenue when the restaurants covered by the fees are opened or all material services or conditions relating to the fees have been substantially performed or satisfied by the Company. The Company recognizes royalty revenues as earned. Franchise renewal fees are recognized when a renewal agreement becomes effective. 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Franchise royalties $ 32.9 $ 29.5 $ 106.7 $ 95.4 Franchise fees 1.6 1.4 3.9 4.3 Franchise royalties and fees $ 34.5 $ 30.9 $ 110.6 $ 99.7 Recent Accounting Pronouncements That the Company Has Not Yet Adopted. In May 2014, the FASB issued guidance for recognizing revenue in contracts with customers across all industries. This guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard allows for either a full retrospective or modified retrospective transition method. In July 2015, the FASB voted to defer the effective date by one year. Under the proposal, the new revenue standard would be effective for annual reporting periods beginning after December 15, 2017. The new standard will not impact our recognition of sales from Company-operated restaurants, ongoing royalty fees which are based on a percentage of franchise sales, or rent from franchised restaurants which are composed of rental income and other fees associated with properties leased or subleased to franchisees. The Company is evaluating the impact that adopting this guidance will have on its consolidated financial statements. In April 2015, the FASB issued guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard is effective for our fiscal year 2016 and will be applied on a retrospective basis. The Company had $0.7 million and $0.9 million of debt issuance costs at October 4, 2015 and December 28, 2014 , respectively. We have reviewed other recently issued accounting pronouncements by the FASB and other standards-setting bodies and concluded that they are either not applicable to our business or are not expected to have a material impact on the financial statements upon adoption.

Other Current Assets

Other Current Assets	9 Months Ended
	Oct. 04, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Current Assets	Other Current Assets (In millions) 10/4/2015 12/28/2014 Prepaid income taxes $ 1.9 $ 2.8 Prepaid expenses and other current assets 3.6 4.6 $ 5.5 $ 7.4

Other Current Liabilities

Other Current Liabilities	9 Months Ended
	Oct. 04, 2015
Other Liabilities Disclosure [Abstract]
Other Current Liabilities	Other Current Liabilities (In millions) 10/4/2015 12/28/2014 Accrued wages, bonuses and severances $ 8.1 $ 8.5 Other 3.6 3.9 $ 11.7 $ 12.4

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Oct. 04, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The following table reflects assets and liabilities that are measured at fair value on a recurring basis as of October 4, 2015 and December 28, 2014 : (In millions) Quoted Prices in Active Markets for Identical Asset or Liability (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Carrying Value October 4, 2015 Financial Assets Cash equivalents $ 6.9 $ — $ — $ 6.9 Restricted cash (advertising cooperative assets) 4.3 — — 4.3 Total assets at fair value $ 11.2 $ — $ — $ 11.2 Financial Liabilities Interest rate swap agreement $ — $ 1.1 $ — $ 1.1 Long term debt and other borrowings — 112.4 — 109.7 Total liabilities at fair value $ — $ 113.5 $ — $ 110.8 December 28, 2014 Financial Assets Cash equivalents $ 9.0 $ — $ — $ 9.0 Restricted cash (advertising cooperative assets) 4.3 — — 4.3 Interest rate swap agreement — — — — Total assets at fair value $ 13.3 $ — $ — $ 13.3 Financial Liabilities Long term debt and other borrowings $ — $ 115.7 $ — $ 109.9 Total liabilities at fair value $ — $ 115.7 $ — $ 109.9 There were no transfers among levels within the fair value hierarchy during the forty weeks ended October 4, 2015 . At October 4, 2015 and December 28, 2014 , the fair value of the Company’s current assets and current liabilities approximates carrying value because of the short-term nature of these instruments. The fair value of the Company’s interest rate swap at October 4, 2015 and December 28, 2014 , respectively, was based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swap, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”). The fair value of each of the Company’s long-term debt instruments is based on the amount of future cash flows associated with each instrument, discounted using the Company’s current borrowing rate for a similar debt instrument of comparable maturity and is considered a Level 2 valuation.

Long-Term Debt

Long-Term Debt	9 Months Ended
	Oct. 04, 2015
Debt Disclosure [Abstract]
Long-Term Debt	Long-term Debt (In millions) 10/4/2015 12/28/2014 2013 Credit Facility $ 106.0 $ 106.0 Capital lease obligations 2.2 2.2 Other notes 1.5 1.7 109.7 109.9 Less current portion (0.3 ) (0.3 ) Long-term debt $ 109.4 $ 109.6 2013 Credit Facility. On December 18, 2013, the Company entered into a bank credit facility with a group of lenders consisting of a five year $125.0 million revolving credit facility. During the second quarter 2014, the Company increased its revolving credit capacity by $10.0 million , to $135.0 million . Under the terms of the 2013 Credit Facility, the Company can request additional revolving loan commitments of up to $115.0 million . Under the terms of the revolving credit facility, the Company may obtain other short-term borrowings up to $10.0 million and letters of credit up to $20.0 million . Collectively, these other borrowings and letters of credit may not exceed the amount of unused borrowings under the 2013 Credit Facility. As of October 4, 2015 , the Company had $0.1 million of outstanding letters of credit. Availability for short-term borrowings and letters of credit under the revolving credit facility was $28.9 million . As of the end of the third quarter 2015, the Company was in compliance with the financial and other covenants of the 2013 Credit Facility. The Company’s weighted average interest rate for all outstanding indebtedness under the 2013 Credit Facility, including fixed and floating rate debt, was 2.5% as of October 4, 2015 . Interest Rate Swap Agreements. The Company uses interest rate swap agreements to fix the interest rate exposure on a portion of its outstanding revolving debt. On December 16, 2014 and June 15, 2015 the Company entered into interest rate swap contracts effective January 5, 2015 and July 6, 2015, respectively. The Company’s interest rate swap contracts limit the interest rate exposure on $85 million of floating rate debt borrowed under its 2013 Credit Facility to a fixed rate of 2.70% . The swap agreements are scheduled to expire January 5, 2018 .

Deferred Credits and Other Long

Deferred Credits and Other Long-Term Liabilities	9 Months Ended
	Oct. 04, 2015
Deferred Credits and Other Long-Term Liabilities [Abstract]
Deferred Credits and Other Long-Term Liabilities	Deferred Credits and Other Long-Term Liabilities (In millions) 10/4/2015 12/28/2014 Deferred franchise revenues $ 6.7 $ 3.7 Deferred gains on unit conversions 0.5 0.8 Deferred rentals 7.6 7.6 Above-market rent obligations 2.4 2.5 Deferred income taxes 17.3 16.0 Other 3.1 1.8 $ 37.6 $ 32.4

Other Expenses (Income), Net

Other Expenses (Income), Net	9 Months Ended
	Oct. 04, 2015
Other Income and Expenses [Abstract]
Other Expenses (Income), Net	Other Expenses (Income), Net 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Disposals of property and equipment $ 0.1 $ — $ 0.1 $ 0.2 Net gain on sale of assets — — (0.2 ) (0.1 ) Executive transition expenses — 0.2 0.4 1.6 Recoveries under Settlement Program — — (0.4 ) — Other expenses (income), net $ 0.1 $ 0.2 $ (0.1 ) $ 1.7 During the second quarter 2015, the Company received $0.4 million in settlement of its outstanding claims filed pursuant to the Deepwater Horizon Economic and Property Damages Settlement Program (“Settlement Program”).

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Oct. 04, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Formula and Supply Agreements. The 2014 supply agreement provides that the Company agrees to utilize, and to require its franchisees to utilize, Diversified Foods and Seasonings, L.L.C. (“Diversified”) as the exclusive supplier of certain agreed upon core products in the continental United States. The term of the supply agreement continues until March 2034, unless earlier terminated in accordance with the terms of the agreement. Business Process Services. During the second quarter 2015, the Company extended the contract for its accounting and information technology services with a third party provider for three years. The future minimum payments under the extension are approximately $1.4 million annually. Litigation. The Company is a defendant in various legal proceedings arising in the ordinary course of business, including claims resulting from “slip and fall” accidents, employment-related claims, claims from guests or employees alleging illness, injury or other food quality, health or operational concerns and claims related to franchise matters. The Company establishes reserves to provide for the settlement of such matters when payment is probable and reasonably estimable. The Company’s management believes their ultimate resolution will not have a material adverse effect on the Company’s financial condition or its results of operations. Insurance Programs. The Company carries property, general liability, business interruption, crime, directors and officers liability, privacy and network liability, employment practices liability, environmental and workers’ compensation insurance policies which it believes are customary for businesses of its size and type. Pursuant to the terms of their franchise agreements, the Company’s franchisees are also required to maintain certain types and levels of insurance coverage, including commercial general liability insurance, workers’ compensation insurance, all risk property and automobile insurance.

Interest Expense, Net

Interest Expense, Net	9 Months Ended
	Oct. 04, 2015
Banking and Thrift, Interest [Abstract]
Interest Expense, Net	Interest Expense, Net 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Interest on debt $ 0.7 $ 0.4 $ 2.0 $ 1.1 Reclassification adjustment for derivative losses 0.1 0.2 0.2 0.6 Amortization and write-offs of debt issuance costs — 0.1 0.2 0.3 Other debt related charges, net 0.1 0.1 0.4 0.4 $ 0.9 $ 0.8 $ 2.8 $ 2.4

Income Taxes

Income Taxes	9 Months Ended
	Oct. 04, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s effective tax rates were 37.6% and 38.4% for the twelve week periods ended October 4, 2015 and October 5, 2014 , respectively. The Company's effective tax rates were 38.1% and 38.0% for the forty week periods ended October 4, 2015 and October 5, 2014 , respectively. The lower effective tax rate for the twelve week period ended October 4, 2015 is primarily due to favorable provision to return adjustments which include the effects of the reconciliation of income tax amounts recorded in our consolidated financial statements to the amounts reflected in our tax returns. Higher state income tax obligations and expiration of certain tax credits have resulted in a higher effective tax rate in the forty week period ended October 4, 2015 . The effective tax rates differ from statutory rates due to adjustments to estimated tax reserves, tax credits and permanent differences between reported income and taxable income for tax purposes. As of October 4, 2015 , the amount of unrecognized tax benefits was approximately $1.3 million , of which approximately $0.3 million , if recognized, would affect the effective income tax rate. The Company files income tax returns in the United States and various state jurisdictions. The U.S. federal tax years 2011 through 2014 are open to audit. In general, the state tax years open to audit range from 2010 through 2014 .

Components of Earnings Per Comm

Components of Earnings Per Common Share Computation	9 Months Ended
	Oct. 04, 2015
Earnings Per Share [Abstract]
Components of Earnings Per Common Share Computation	Components of Earnings Per Common Share Computation The Company’s basic earnings per share calculation is computed based on the weighted-average number of common shares outstanding. The diluted earnings per share calculation is computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive common shares include employee stock options, non-vested restricted stock awards and non-vested restricted share units. Performance based awards are included in the average diluted shares outstanding each period if the performance criteria have been met at the end of the respective periods. Potentially dilutive shares are excluded from the diluted earnings per share computation in periods in which they have an anti-dilutive effect. There were approximately 0.1 million potentially dilutive shares excluded from the computation of diluted earnings per share for the twelve and forty week periods ended October 4, 2015 and October 5, 2014 , respectively. 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Net Income $ 10.6 $ 9.8 $ 34.5 $ 29.2 Denominator for basic earnings per share — weighted average shares 22.6 23.2 22.8 23.4 Dilutive employee stock awards 0.2 0.3 0.3 0.4 Denominator for diluted earnings per share 22.8 23.5 23.1 23.8

Segment Information

Segment Information	9 Months Ended
	Oct. 04, 2015
Segment Reporting [Abstract]
Segment Information	Segment Information The Company is engaged in developing, operating and franchising Popeyes Louisiana Kitchen quick-service restaurants. Based on its internal reporting and management structure, the Company has determined that it has two reportable segments: franchise operations and Company-operated restaurants. The Company-operated restaurant segment derives its revenues from the operation of Company-owned restaurants. The franchise segment consists of domestic and international franchising activities and derives its revenues principally from (1) ongoing royalty payments that are determined based on a percentage of franchisee sales; (2) franchise fees associated with new restaurant openings; (3) development fees associated with the opening of new franchised restaurants in a given market; and (4) rental income associated with properties leased or subleased to franchisees. 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Revenues Franchise operations $ 35.7 $ 32.4 $ 114.8 $ 104.5 Company-operated restaurants 25.4 22.5 85.2 74.2 $ 61.1 $ 54.9 $ 200.0 $ 178.7 Operating profit Franchise operations $ 16.7 $ 16.3 $ 52.7 $ 47.7 Company-operated restaurants 3.6 2.7 13.2 10.2 20.3 19.0 65.9 57.9 Less unallocated expenses Depreciation and amortization 2.3 2.1 7.5 6.7 Other expenses (income), net 0.1 0.2 (0.1 ) 1.7 Operating Profit 17.9 16.7 58.5 49.5 Interest expense, net 0.9 0.8 2.8 2.4 Income before income taxes $ 17.0 $ 15.9 $ 55.7 $ 47.1 Capital expenditures Franchise operations $ 0.2 $ 1.1 $ 0.8 $ 5.0 Company-operated restaurants 3.1 5.4 10.4 14.4 $ 3.3 $ 6.5 $ 11.2 $ 19.4

Significant Accounting Polici21

Significant Accounting Policies (Policies)	9 Months Ended
	Oct. 04, 2015
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation. The accompanying condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, certain information required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements is not included. The Consolidated Balance Sheet data as of December 28, 2014 that is presented herein was derived from the Company’s audited consolidated financial statements for the fiscal year then ended. The condensed consolidated financial statements as of October 4, 2015 , have not been audited by the Company’s independent registered public accountants, but in the opinion of management, they contain all normal recurring adjustments necessary for a fair statement of the Company’s financial condition and results of operations for the interim periods presented. Interim period operating results are not necessarily indicative of the results expected for the full fiscal year. The Company suggests that the accompanying financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2014 Form 10-K. Except as disclosed herein, there has been no material change in the information disclosed in the notes to our consolidated financial statements included in the 2014 Form 10-K.
Use of Estimates	Use of Estimates . The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates affect the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition — Franchise Operations	Revenue Recognition — Franchise Operations. Revenues from franchising activities include development fees associated with a franchisee’s planned development of a specified number of restaurants within a defined geographic territory, franchise fees associated with the opening of new restaurants, renewal fees associated with the renewal of franchise agreements, transfer fees for the transfer of a restaurant to another entity, and ongoing royalty fees which are generally based on five percent of net restaurant sales. Development fees and franchise fees are recorded as deferred franchise revenue when received and are recognized as revenue when the restaurants covered by the fees are opened or all material services or conditions relating to the fees have been substantially performed or satisfied by the Company. The Company recognizes royalty revenues as earned. Franchise renewal fees are recognized when a renewal agreement becomes effective.
Recent Accounting Pronouncements That the Company Has Not Yet Adopted	Recent Accounting Pronouncements That the Company Has Not Yet Adopted. In May 2014, the FASB issued guidance for recognizing revenue in contracts with customers across all industries. This guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard allows for either a full retrospective or modified retrospective transition method. In July 2015, the FASB voted to defer the effective date by one year. Under the proposal, the new revenue standard would be effective for annual reporting periods beginning after December 15, 2017. The new standard will not impact our recognition of sales from Company-operated restaurants, ongoing royalty fees which are based on a percentage of franchise sales, or rent from franchised restaurants which are composed of rental income and other fees associated with properties leased or subleased to franchisees. The Company is evaluating the impact that adopting this guidance will have on its consolidated financial statements. In April 2015, the FASB issued guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard is effective for our fiscal year 2016 and will be applied on a retrospective basis. The Company had $0.7 million and $0.9 million of debt issuance costs at October 4, 2015 and December 28, 2014 , respectively. We have reviewed other recently issued accounting pronouncements by the FASB and other standards-setting bodies and concluded that they are either not applicable to our business or are not expected to have a material impact on the financial statements upon adoption.

Significant Accounting Polici22

Significant Accounting Policies Significant Accounting Policies (Tables)	9 Months Ended
	Oct. 04, 2015
Accounting Policies [Abstract]
Schedule of revenue, franchise fees	Franchise renewal fees are recognized when a renewal agreement becomes effective. 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Franchise royalties $ 32.9 $ 29.5 $ 106.7 $ 95.4 Franchise fees 1.6 1.4 3.9 4.3 Franchise royalties and fees $ 34.5 $ 30.9 $ 110.6 $ 99.7

Other Current Assets (Tables)

Other Current Assets (Tables)	9 Months Ended
	Oct. 04, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Summary of other current assets	(In millions) 10/4/2015 12/28/2014 Prepaid income taxes $ 1.9 $ 2.8 Prepaid expenses and other current assets 3.6 4.6 $ 5.5 $ 7.4

Other Current Liabilities (Tabl

Other Current Liabilities (Tables)	9 Months Ended
	Oct. 04, 2015
Other Liabilities Disclosure [Abstract]
Summary of other current liabilities	(In millions) 10/4/2015 12/28/2014 Accrued wages, bonuses and severances $ 8.1 $ 8.5 Other 3.6 3.9 $ 11.7 $ 12.4

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Oct. 04, 2015
Fair Value Disclosures [Abstract]
Summary of assets and liabilities that are measured at fair value on a recurring basis	The following table reflects assets and liabilities that are measured at fair value on a recurring basis as of October 4, 2015 and December 28, 2014 : (In millions) Quoted Prices in Active Markets for Identical Asset or Liability (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Carrying Value October 4, 2015 Financial Assets Cash equivalents $ 6.9 $ — $ — $ 6.9 Restricted cash (advertising cooperative assets) 4.3 — — 4.3 Total assets at fair value $ 11.2 $ — $ — $ 11.2 Financial Liabilities Interest rate swap agreement $ — $ 1.1 $ — $ 1.1 Long term debt and other borrowings — 112.4 — 109.7 Total liabilities at fair value $ — $ 113.5 $ — $ 110.8 December 28, 2014 Financial Assets Cash equivalents $ 9.0 $ — $ — $ 9.0 Restricted cash (advertising cooperative assets) 4.3 — — 4.3 Interest rate swap agreement — — — — Total assets at fair value $ 13.3 $ — $ — $ 13.3 Financial Liabilities Long term debt and other borrowings $ — $ 115.7 $ — $ 109.9 Total liabilities at fair value $ — $ 115.7 $ — $ 109.9

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Oct. 04, 2015
Debt Disclosure [Abstract]
Summary of long-term debt	(In millions) 10/4/2015 12/28/2014 2013 Credit Facility $ 106.0 $ 106.0 Capital lease obligations 2.2 2.2 Other notes 1.5 1.7 109.7 109.9 Less current portion (0.3 ) (0.3 ) Long-term debt $ 109.4 $ 109.6

Deferred Credits and Other Lo27

Deferred Credits and Other Long-Term Liabilities (Tables)	9 Months Ended
	Oct. 04, 2015
Deferred Credits and Other Long-Term Liabilities [Abstract]
Summary of deferred credits and other long-term liabilities	(In millions) 10/4/2015 12/28/2014 Deferred franchise revenues $ 6.7 $ 3.7 Deferred gains on unit conversions 0.5 0.8 Deferred rentals 7.6 7.6 Above-market rent obligations 2.4 2.5 Deferred income taxes 17.3 16.0 Other 3.1 1.8 $ 37.6 $ 32.4

Other Expenses (Income), Net (T

Other Expenses (Income), Net (Tables)	9 Months Ended
	Oct. 04, 2015
Other Income and Expenses [Abstract]
Summary of other expenses (income), net	12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Disposals of property and equipment $ 0.1 $ — $ 0.1 $ 0.2 Net gain on sale of assets — — (0.2 ) (0.1 ) Executive transition expenses — 0.2 0.4 1.6 Recoveries under Settlement Program — — (0.4 ) — Other expenses (income), net $ 0.1 $ 0.2 $ (0.1 ) $ 1.7

Interest Expense, Net (Tables)

Interest Expense, Net (Tables)	9 Months Ended
	Oct. 04, 2015
Banking and Thrift, Interest [Abstract]
Summary of interest expense, net	12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Interest on debt $ 0.7 $ 0.4 $ 2.0 $ 1.1 Reclassification adjustment for derivative losses 0.1 0.2 0.2 0.6 Amortization and write-offs of debt issuance costs — 0.1 0.2 0.3 Other debt related charges, net 0.1 0.1 0.4 0.4 $ 0.9 $ 0.8 $ 2.8 $ 2.4

Components of Earnings Per Co30

Components of Earnings Per Common Share Computation (Tables)	9 Months Ended
	Oct. 04, 2015
Earnings Per Share [Abstract]
Summary of computation of earnings per share	12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Net Income $ 10.6 $ 9.8 $ 34.5 $ 29.2 Denominator for basic earnings per share — weighted average shares 22.6 23.2 22.8 23.4 Dilutive employee stock awards 0.2 0.3 0.3 0.4 Denominator for diluted earnings per share 22.8 23.5 23.1 23.8

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Oct. 04, 2015
Segment Reporting [Abstract]
Summary of segment information	The franchise segment consists of domestic and international franchising activities and derives its revenues principally from (1) ongoing royalty payments that are determined based on a percentage of franchisee sales; (2) franchise fees associated with new restaurant openings; (3) development fees associated with the opening of new franchised restaurants in a given market; and (4) rental income associated with properties leased or subleased to franchisees. 12 Weeks Ended 40 Weeks Ended (In millions) 10/4/2015 10/5/2014 10/4/2015 10/5/2014 Revenues Franchise operations $ 35.7 $ 32.4 $ 114.8 $ 104.5 Company-operated restaurants 25.4 22.5 85.2 74.2 $ 61.1 $ 54.9 $ 200.0 $ 178.7 Operating profit Franchise operations $ 16.7 $ 16.3 $ 52.7 $ 47.7 Company-operated restaurants 3.6 2.7 13.2 10.2 20.3 19.0 65.9 57.9 Less unallocated expenses Depreciation and amortization 2.3 2.1 7.5 6.7 Other expenses (income), net 0.1 0.2 (0.1 ) 1.7 Operating Profit 17.9 16.7 58.5 49.5 Interest expense, net 0.9 0.8 2.8 2.4 Income before income taxes $ 17.0 $ 15.9 $ 55.7 $ 47.1 Capital expenditures Franchise operations $ 0.2 $ 1.1 $ 0.8 $ 5.0 Company-operated restaurants 3.1 5.4 10.4 14.4 $ 3.3 $ 6.5 $ 11.2 $ 19.4

Description of Business (Detail

Description of Business (Details Textual)	Oct. 04, 2015CountryStateTerritory
Description of Business (Textual) [Abstract]
Number of states, franchises quick-service restaurants | State	48
Number of territories, franchises quick-service restaurants | Territory	3
Number of countries, franchises quick-service restaurants	27

Significant Accounting Polici33

Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Accounting Policies [Abstract]
Franchise royalties	$ 32.9	$ 29.5	$ 106.7	$ 95.4
Franchise fees	1.6	1.4	3.9	4.3
Franchise royalties and fees	$ 34.5	$ 30.9	$ 110.6	$ 99.7

Significant Accounting Polici34

Significant Accounting Policies (Details Textual) - USD ($) $ in Millions	9 Months Ended
	Oct. 04, 2015	Dec. 28, 2014
Concentration Risk [Line Items]
Debt issuance costs	$ 0.7	$ 0.9
Net Restaurant Sales
Concentration Risk [Line Items]
Royalty revenue, percentage of	5.00%

Other Current Assets (Details)

Other Current Assets (Details) - USD ($) $ in Millions	Oct. 04, 2015	Dec. 28, 2014
Summary of other current assets
Prepaid income taxes	$ 1.9	$ 2.8
Prepaid expenses and other current assets	3.6	4.6
Other current assets	$ 5.5	$ 7.4

Other Current Liabilities (Deta

Other Current Liabilities (Details) - USD ($) $ in Millions	Oct. 04, 2015	Dec. 28, 2014
Summary of other current liabilities
Accrued wages, bonuses and severances	$ 8.1	$ 8.5
Other	3.6	3.9
Other current liabilities	$ 11.7	$ 12.4

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Millions	Oct. 04, 2015	Dec. 28, 2014
Financial Assets
Cash equivalents	$ 6.9	$ 9
Restricted cash (advertising cooperative assets)	4.3	4.3
Interest rate swap agreement		0
Total assets at fair value	11.2	13.3
Financial Liabilities
Interest rate swap agreement	1.1
Long term debt and other borrowings	109.7	109.9
Total liabilities at fair value	110.8	109.9
Quoted Prices in Active Markets for Identical Asset or Liability (Level 1)
Financial Assets
Cash equivalents	6.9	9
Restricted cash (advertising cooperative assets)	4.3	4.3
Interest rate swap agreement		0
Total assets at fair value	11.2	13.3
Financial Liabilities
Interest rate swap agreement	0
Long term debt and other borrowings	0	0
Total liabilities at fair value	0	0
Significant Other Observable Inputs (Level 2)
Financial Assets
Cash equivalents	0	0
Restricted cash (advertising cooperative assets)	0	0
Interest rate swap agreement		0
Total assets at fair value	0	0
Financial Liabilities
Interest rate swap agreement	1.1
Long term debt and other borrowings	112.4	115.7
Total liabilities at fair value	113.5	115.7
Significant Unobservable Inputs (Level 3)
Financial Assets
Cash equivalents	0	0
Restricted cash (advertising cooperative assets)	0	0
Interest rate swap agreement		0
Total assets at fair value	0	0
Financial Liabilities
Interest rate swap agreement	0
Long term debt and other borrowings	0	0
Total liabilities at fair value	$ 0	$ 0

Fair Value Measurements (Deta38

Fair Value Measurements (Details Textual)	9 Months Ended
	Oct. 04, 2015
Fair Value Disclosures [Abstract]
Fair value hierarchy transfers among levels	There were no transfers among levels within the fair value hierarchy during the forty weeks ended October 4, 2015.

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Millions	Oct. 04, 2015	Dec. 28, 2014
Summary of long-term debt
2013 Credit Facility	$ 106	$ 106
Capital lease obligations	2.2	2.2
Other notes	1.5	1.7
Long-term debt including current portion	109.7	109.9
Less current portion	(0.3)	(0.3)
Long-term debt	$ 109.4	$ 109.6

Long-Term Debt (Details Textual

Long-Term Debt (Details Textual) - USD ($)	Dec. 18, 2013	Jun. 15, 2015	Oct. 04, 2015
Interest Rate Swap
Long-Term Debt (Textual) [Abstract]
Interest rate exposure		$ 85,000,000
Derivative, fixed interest rate		2.70%
2013 Credit Facility | Revolving Credit Facility
Long-Term Debt (Textual) [Abstract]
Bank credit facility period	5 years
Maximum borrowing capacity	$ 125,000,000		$ 135,000,000
Additional borrowing capacity available	115,000,000		10,000,000
Other short-term borrowings	10,000,000
Outstanding letters of credit			100,000
Remaining borrowing capacity			$ 28,900,000
Weighted average interest rate for all outstanding indebtedness			2.50%
2013 Credit Facility | Letter of Credit
Long-Term Debt (Textual) [Abstract]
Additional borrowing capacity available	$ 20,000,000

Deferred Credits and Other Lo41

Deferred Credits and Other Long-Term Liabilities (Details) - USD ($) $ in Millions	Oct. 04, 2015	Dec. 28, 2014
Deferred Credits and Other Long-Term Liabilities
Deferred franchise revenues	$ 6.7	$ 3.7
Deferred gains on unit conversions	0.5	0.8
Deferred rentals	7.6	7.6
Above-market rent obligations	2.4	2.5
Deferred income taxes	17.3	16
Other	3.1	1.8
Deferred credits and other long-term liabilities	$ 37.6	$ 32.4

Other Expenses (Income), Net (D

Other Expenses (Income), Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Other Expenses (Income), Net
Disposals of property and equipment	$ 0.1	$ 0	$ 0.1	$ 0.2
Net gain on sale of assets	0	0	(0.2)	(0.1)
Executive transition expenses	0	0.2	0.4	1.6
Recoveries under Settlement Program	0	0	(0.4)	0
Other expenses (income), net	$ 0.1	$ 0.2	$ (0.1)	$ 1.7

Other Expenses (Income), Net 43

Other Expenses (Income), Net (Details Textual) $ in Millions	3 Months Ended
	Oct. 04, 2015USD ($)
Other Income and Expenses [Abstract]
Proceeds from legal settlements	$ 0.4

Commitments and Contingencies (

Commitments and Contingencies (Details Textual) $ in Millions	3 Months Ended
	Oct. 04, 2015USD ($)
Commitments and Contingencies (Textual) [Abstract]
Contract term	3 years
Business Process Services
Commitments and Contingencies (Textual) [Abstract]
Contract obligation, year 1	$ 1.4
Contract obligation, year 2	1.4
Contract obligation, year 3	$ 1.4

Interest Expense, Net (Details)

Interest Expense, Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Interest Expense, Net
Interest on debt	$ 0.7	$ 0.4	$ 2	$ 1.1
Reclassification adjustments for derivative losses included in earnings	0.1	0.2	0.2	0.6
Amortization and write-offs of debt issuance costs	0	0.1	0.2	0.3
Other debt related charges, net	0.1	0.1	0.4	0.4
Interest expense, net	$ 0.9	$ 0.8	$ 2.8	$ 2.4

Income Taxes (Details Textual)

Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Income Taxes (Textual) [Abstract]
Effective tax rates	37.60%	38.40%	38.10%	38.00%
Unrecognized tax benefits	$ 1.3		$ 1.3
Recognized tax benefits	$ 0.3		$ 0.3
U.S. Federal Tax
Income Taxes (Textual) [Abstract]
Tax years examination			2011 through 2014
State Tax
Income Taxes (Textual) [Abstract]
Tax years examination			2010 through 2014
Minimum | State Tax
Income Taxes (Textual) [Abstract]
Tax years examination			2,010
Maximum | State Tax
Income Taxes (Textual) [Abstract]
Tax years examination			2,014

Components of Earnings Per Co47

Components of Earnings Per Common Share Computation (Details Textual) - shares shares in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Components of Earnings Per Common Share Computation (Textual) [Abstract]
Stock options not included in computation of diluted earnings per share (in shares)	0.1	0.1	0.1	0.1

Components of Earnings Per Co48

Components of Earnings Per Common Share Computation (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Summary of computation of earnings per share
Net Income	$ 10.6	$ 9.8	$ 34.5	$ 29.2
Denominator for basic earnings per share — weighted average shares (in shares)	22.6	23.2	22.8	23.4
Dilutive employee stock awards (in shares)	0.2	0.3	0.3	0.4
Denominator for diluted earnings per share (in shares)	22.8	23.5	23.1	23.8

Segment Information (Details Te

Segment Information (Details Textual)	9 Months Ended
	Oct. 04, 2015Segment
Segment Information (Textual) [Abstract]
Number of reportable segments	2

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 04, 2015	Oct. 05, 2014	Oct. 04, 2015	Oct. 05, 2014
Revenues
Total revenue	$ 61.1	$ 54.9	$ 200	$ 178.7
Operating profit
Operating profit, gross	20.3	19	65.9	57.9
Less unallocated expenses
Depreciation and amortization	2.3	2.1	7.5	6.7
Other expenses (income), net	0.1	0.2	(0.1)	1.7
Operating Profit	17.9	16.7	58.5	49.5
Interest expense, net	0.9	0.8	2.8	2.4
Income before income taxes	17	15.9	55.7	47.1
Capital expenditures
Capital expenditures	3.3	6.5	11.2	19.4
Franchise operations
Revenues
Total revenue	35.7	32.4	114.8	104.5
Operating profit
Operating profit, gross	16.7	16.3	52.7	47.7
Capital expenditures
Capital expenditures	0.2	1.1	0.8	5
Company-operated restaurants
Revenues
Total revenue	25.4	22.5	85.2	74.2
Operating profit
Operating profit, gross	3.6	2.7	13.2	10.2
Capital expenditures
Capital expenditures	$ 3.1	$ 5.4	$ 10.4	$ 14.4