EXHIBIT 99.1
AFC ENTERPRISES RELEASES MID-QUARTER BUSINESS UPDATE FOR FOURTH QUARTER 2004
ATLANTA, Dec. 15 -- AFC Enterprises, Inc. (Nasdaq: AFCE), the franchisor and
operator of Popeyes(R) Chicken & Biscuits and Church's Chicken(TM), today
announced operating performance results for the Company's fiscal period 11,
which began October 4, 2004 and ended October 31, 2004, and fiscal period 12,
which began November 1, 2004 and ended November 28, 2004.
Overall Performance
Domestic System-wide Same-Store Sales Growth
The Company reported that blended domestic same-store sales growth for the
system were up 1.8 percent in period 11 and up 2.7 percent in period 12 of 2004,
compared to down 0.8 percent and up 0.3 percent for period 11 and period 12 of
2003. Popeyes domestic same-store sales were up 2.3 percent in period 11 and up
3.8 percent in period 12. Popeyes period 12 performance represents the brand's
strongest year-over-year improvement since the first quarter of 2002. Church's
domestic same-store sales were up 1.1 percent in period 11 and up 0.7 percent in
period 12. The Church's results were measured against strong performance for the
comparable periods of 2003.
The Company's average check was up for both brands in period 11 and period 12 of
2004. Church's average check was up 8.4 percent and 8.2 percent, respectively.
Popeyes average check was up 4.8 percent and 6.1 percent, respectively. AFC
continued experiencing a year-over-year decrease in the number of transactions
for both Popeyes and Church's in period 11 and period 12. However, Popeyes
demonstrated modest transaction improvements in both period 11 and period 12 as
the brand reported its lowest percentage year-over- year decline since the third
quarter of 2003. AFC remains focused on improving this trend with new
advertising, menu expansion and overall enhancements in restaurant operations.
Domestic system-wide comparable store sales by brand were as follows:
P11 2003 P11 2004 P12 2003 P12 2004
Domestic System-wide 10/6/03- 10/4/04- 11/3/03- 11/1/04-
Comparable Store Sales 11/2/03 10/31/04 11/30/03 11/28/04
Popeyes (3.1%) 2.3% (1.1%) 3.8%
Church's 3.2% 1.1% 2.0% 0.7%
Blended Domestic System-wide
Comparable Store Sales (0.8%) 1.8% 0.3% 2.7%
Specific sales initiatives for the brands in periods 11 and 12 of 2004 included:
- Popeyes featured its core menu products, including a 3-piece chicken
and biscuit offer targeting single users, in addition to an 11-piece
box for family users.
- Popeyes continued testing its Popeyes Naked Chicken(TM) Strips in the
Atlanta market. The brand also tested other line extensions featuring
different flavor profiles.
- Church's featured the return of its popular Texas Chicken(TM), a non-
breaded half chicken covered with char-grilled flavored seasonings.
- Church's also featured a Crunchy Tender Strips(R) combo meal available
in Zesty or classic.
Unit Openings and Unit Count
The AFC system opened a total of 35 restaurants during period 11 and period 12
of 2004, compared to 44 total system-wide openings during the same periods in
2003. On a system-wide basis, AFC had 3,373 units at the end of period 12 of
2004, comprised of 2,701 domestic units and 672 units in Puerto Rico and 28
foreign countries. This total unit count represented 340 Company- owned and
3,033 franchised restaurants.
Unit Openings
P11 P11 P12 P12
2003 2004 2003 2004
Popeyes 17 8 17 8
Church's 6 6 4 13
Total 23 14 21 21
Unit Count
P11 P11 P12 P12
2003 2004 2003 2004
Popeyes 1,785 1,815 1,796 1,817
Church's 1,513 1,543 1,515 1,556
Total 3,298 3,358 3,311 3,373
Commitments
On a system-wide basis, 81 new commitments for future development were signed
during period 11 and period 12 of 2004. This was comprised of 43 new commitments
from Popeyes and 38 new commitments from Church's. As of November 28, 2004, AFC
had 1,668 outstanding commitments for future development, representing 965 for
Popeyes and 703 for Church's.
Outstanding Debt
AFC's outstanding debt under its credit facility agreement, net of investments,
at the end of period 12 of 2004 was approximately $82.4 million as compared to
$107.1 million at the end of period 10 of 2004.
Strategic Update
The Company expects the pending sale of Church's to an affiliate of Crescent
Capital Investments, Inc., an Atlanta-based private equity firm, to close by
year-end. As previously stated on November 1, 2004, AFC expects net proceeds
from the sale of Church's, after tax considerations, to be approximately $275
million.
Frank Belatti, Chairman and CEO of AFC Enterprises, stated, "We are pleased with
our improvement in comparable same-store sales and with Popeyes' slight recovery
in transactions. The Company's immediate focus continues to be on closing the
Church's transaction, improving the performance of Popeyes and downsizing the
corporate center."
Corporate Profile
AFC Enterprises, Inc. is the franchisor and operator of 3,373 restaurants as of
November 28, 2004, in the United States, Puerto Rico and 28 foreign countries
under the brand names Popeyes(R) Chicken & Biscuits and Church's Chicken(TM).
AFC's primary objective is to be the world's Franchisor of Choice(R) by offering
investment opportunities in highly recognizable brands and exceptional
franchisee support systems and services. AFC Enterprises can be found on the
World Wide Web at http://www.afce.com.
AFC Contact Information:
Felise Glantz Kissell, Vice President, Investor Relations & Finance (770)
353-3086 or fkissell@afce.com
Forward-Looking Statement: Certain statements in this release, and other written
or oral statements made by or on behalf of AFC or its brands are
"forward-looking statements" within the meaning of the federal securities laws.
Statements regarding future events and developments and our future performance,
as well as management's expectations, beliefs, plans, estimates or projections
relating to the future, are forward-looking statements within the meaning of
these laws. These forward-looking statements are subject to a number of risks
and uncertainties. Among the important factors that could cause actual results
to differ materially from those indicated by such forward-looking statements are
adverse effects of litigation or regulatory actions arising in connection with
the restatement of our previously issued financial statements, the pending sale
of Church's, the loss of franchisees and other business partners, failure of our
franchisees, the loss of senior management and the ability to attract and retain
additional qualified management personnel, a decline in the number of new units
to be opened by franchisees, the need to continue to improve our internal
controls, our ability to successfully implement new computer systems,
limitations on our business under our credit facility, our inability to enter
into new franchise
relationships, a decline in our ability to franchise new units, increased costs
of our principal food products, labor shortages, or increased labor costs,
slowed expansion into new markets, changes in consumer preferences and
demographic trends, as well as concerns about health or food quality, unexpected
and adverse fluctuations in quarterly results, increased government regulation,
growth in our franchise system that exceeds our resources to serve that growth,
supply and delivery shortages or interruptions, currency, economic and political
factors that affect our international operations, inadequate protection of our
intellectual property and liabilities for environmental contamination, and other
risk factors detailed in our 2003 Annual Report on Form 10-K/A and other
documents we file with the Securities and Exchange Commission. You should not
place undue reliance on any forward-looking statements, since those statements
speak only as of the date they are made.