Popeye's 2013 Annual Report Download - page 87

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Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2013, 2012, and 2011 — (Continued)
71
Note 20 — 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 agiven market; and (4) rental income
associated with properties leased or subleased to franchisees.
Beginning in 2013, the Company no longer allocates a 5% royalty to the company-operated restaurants for segment
reporting purposes. Segment operating profit for 2012 and 2011have been revised to conform to current year's
presentation.