How Popeyes Louisiana Kitchen Overcame Complacency And Turned Things Around
After being dealt a fatal blow due to complacency, Popeye's had no choice but to implement changes in the company. This helped them to grow into the successful brand that they are today.
A story about chicken sandwiches became a hot topic in August 2019.
It was the year that Popeyes launched their now-famous fried chicken sandwich. This went largely unnoticed until a rival restaurant launched its own brand of fried chicken sandwich and touted it as the original.
Popeyes retaliated subtly on social media, and it sparked an online fried chicken sandwich war.
Despite having plenty of competition, Popeyes seemed to be the crowd-drawer. People went to Popeyes to taste their version of the chicken sandwich, and those who had it were not disappointed. In fact, some even posted rave video reviews of it online.
Soon enough, the chicken sandwich of Popeyes became viral.
There were long lines at Popeyes outlets because people wanted to taste the chicken sandwiches themselves. The demand was so great they ran out of stock frequently. And some people even sold them on eBay for thousands of dollars!
The success of this one item boosted Popeye’s sales for Q4 2019 by 38%. And, of course, they became the chicken sandwich war winner.
Now, it may surprise you to know that Popeyes wasn’t always successful. And they even became bankrupt at some point.
The reason for that?
In this article, we’ll examine how complacency crept into Popeyes operations and what they did to overcome it.
How Popeyes Got Complacent
They say that success is the biggest obstacle to more success. And it became true for Popeyes.
The company’s road to bankruptcy started with its founder, Alvin Copeland. Born into poverty, he launched Popeyes in Louisiana in 1972. And he worked hard to build Popeyes into a national brand.
But as soon as his efforts brought him some success a few decades later, Copeland veered off the path to achieving more success.
He fell into the trap that many entrepreneurs found themselves in.
See, once Popeyes started making a lot of money, Copeland became a big spender. For instance, he bought speedboats and kept them in an all-glass showroom. He also had a Lamborghini sports car constantly parked outside his offices for his viewing pleasure.
What’s more, he got married four times and also got divorced four times. And in one of those weddings, he had a custom model of Cinderella's pumpkin coach built by an auto company.
Now, there’s nothing wrong with purchasing flashy items.
But the problem was that while doing this, Copeland wasn’t improving himself nor paying much attention to his business’s operations. He became complacent about Popeyes.
As you know, when the leadership of a firm is complacent, it’s going to affect the business as a whole. And that’s exactly what happened when he made a fatal judgment call in the late ‘80s.
During that time, KFC was the dominant player among the fried chicken restaurant chains. While Popeyes and another firm, Church’s, were tied in second place. But in his desire to have the largest brand, Copeland decided to acquire Church’s for $400 million in 1989.
The problem was that he bit more than he could chew and didn’t do enough due diligence.
Church's was actually a struggling brand at that time. And the deal cost Copeland so much money that Popeyes’s profits couldn’t offset the debt and interest payments. It didn’t even matter that Popeyes already had more than 500 restaurants back then.
And in 1991, the company failed to restructure its debts and had to file for bankruptcy.
Popeyes’s story is proof that it’s easy for leaders to become comfortable with the successes they’ve achieved and stop aiming for more success. And at that point, it also becomes easy for complacency to creep in and deal a devastating blow.
Fortunately, Popeyes was able to turn the situation around by implementing four key changes in their operations.
The Four Changes
Change #1 - They Parted Ways With Complacent Partners
After Popeyes filed for bankruptcy, a new company, America’s Favorite Chicken (AFC) was created. It served as its parent company until it emerged from bankruptcy.
Although Copeland played a part in the formation of this new firm, it was owned mostly by his debtors. An agreement saw him relinquish ownership of his company to his creditors, but he maintained the rights to his recipes. He received royalties for them until 2014 when Popeyes purchased the rights from him for $41 million.
But Copeland wasn’t the only entity that Popeyes parted ways with. They also parted ways with Church’s, the struggling brand that Copeland acquired.
AFC separated Popeye’s operations from Church’s and encouraged competition between both entities. And in 2004, they sold Church’s to Arcapita and retained Popeyes.
When you retain complacent entities in your business, they'll influence other workers. This will affect your whole operation and may damage the successes you’ve achieved.
By parting ways with complacent partners, Popeye’s found a way out of bankruptcy. This also put them on the path toward recovery and prosperity.
Change #2 - They Diversified
Popeyes’s parent company changed its name to AFC Enterprises, Inc. This decision was aimed at diversifying the Popeyes brand beyond fast-food chicken outlets. So, they set out on an acquisition trail.
First, they acquired the Chesapeake Bagel Bakery chain for $11.8 million in 1997.
The following year, they took over Seattle Coffee Company, a maker, wholesaler, and retailer of specialty coffee for $68.8 million.
They also acquired Cinnabon International Inc., a chain of bakeries known for its oversized cinnamon rolls, for $64 million..
Diversification is another way to expand your operations and grow. When you diversify, you’re increasing your capacity in a different manner and improving your operations. This improves your business as a whole and keeps complacency out the door.
Change #3 - They Expanded Their Operations
Once Popeyes achieved stability, it began expanding its operations.
They established hundreds of new branches nationwide after they overcame bankruptcy. Today, they have more than 2,000 outlets in the United States alone.
But Popeye’s didn’t stop there.
They also focused on international growth, so they added 53 new locations internationally to their operations in 2014. And the following year, they added more international branches. That’s why today, Popeyes has grown into an international brand of gargantuan stature.
The fact is that business expansion keeps entrepreneurs on their toes. And this helps keep complacency at bay.
Change #4 - They Innovated
Innovation is the soul of a perennially successful business.
Fortunately, Popeyes chose to move with the times. That’s why they upgraded their products, their systems, and the way they do business.
It was evident in their chicken sandwich, as they released it at a time when competitors were needing a refresh in their own chicken sandwiches. This move put them on the map and brought them a new wave of success.
The goal of innovating is to constantly improve your operations. In doing so, you banish complacency from your business and this makes it easier for you to prosper.
Defeat Complacency and Achieve More Success
Complacency can ruin your business if you allow it to fester. It was the main reason why Popeyes went into bankruptcy several decades ago. And complacency will still engineer the downfall of more businesses in the future who allow it to take root.
But the good thing is that complacency can be defeated.
Popeyes did this by making the four key changes mentioned in this piece. And by following their steps, you, too, can actively fight complacency and banish it from your operations.
This will prevent you from falling into the trap they did. And at the same time, it will position you for more success.
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