Popeye's 2014 Annual Report Download - page 22

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made contributions to the advertising fund of approximately $110.2 million in 2014, $94.2 million in 2013, and $85.6 million in
2012.
Fiscal Year and Seasonality
During 2014 and 2013, the fiscal year included 52 weeks and our fiscal year was composed of 13 four-week accounting periods
and ends on the last Sunday in December. During 2012, our fourth fiscal quarter was 13 weeks and the fiscal year included 53
weeks. The first quarter of our fiscal year has four periods, or 16 weeks. All other quarters have three periods, or 12 weeks.
Seasonality has little effect on our operations.
Employees
As of January 25, 2015, we had approximately 1,846 hourly employees working in our company-operated restaurants.
Additionally, we had approximately 83 employees involved in the management of our company-operated restaurants, composed
of restaurant managers, multi-unit managers and field management employees. We also had approximately 229 employees
responsible for corporate administration, franchise services and business development.
None of our employees are covered by a collective bargaining agreement. We believe that the dedication of our employees is
critical to our success and that our relationship with our employees is good.
Intellectual Property and Other Proprietary Rights
We own a number of trademarks and service marks that have been registered with the U.S. Patent and Trademark Office, or
for which we have made application to register, including “Popeyes,” “Popeyes Chicken & Biscuits,” and the brand logos for
Popeyes and Popeyes Louisiana Kitchen. In addition, we have registered, or made application to register, one or more of these
marks and others, or their linguistic equivalents, in foreign countries in which we do business, or are contemplating doing business.
There is no assurance that we will be able to obtain the registration for the marks in every country where registration has been
sought. We consider our intellectual property rights to be important to our business and we actively defend and enforce them.
In June 2014, the Company purchased the recipes and formulas (the "formulas") it uses in the preparation of many of its core
menu items from Diversified Foods and Seasonings, L.L.C. ("Diversified"). The formulas were previously licensed to the Company
pursuant to the terms of a 2010 Royalty and Supply Agreement (the "old agreement"). In connection with the formulas purchase,
the Company and Diversified terminated the old agreement and replaced it with a new 2014 Supply Agreement (the "new supply
agreement"). The new supply agreement provides that the Company agrees to utilize, and to require its franchisees to utilize
Diversified as the exclusive supplier of certain agreed upon core products in the continental United States. The term of the new
supply agreement continues until March 2034, unless earlier terminated in accordance with the terms of the agreement.
International Operations
We continue to expand our international operations through franchising. As of December 28, 2014, we had 509 franchised
international restaurants. During 2014, franchise revenues from these operations represented approximately 10.3% of our total
franchise revenues. For each of 2014, 2013, and 2012, international revenues represented 5.7%, 6.4% and 6.9% of total revenues,
respectively.
Insurance
We carry property, general liability, business interruption, crime, directors and officer’s liability, privacy and network liability,
employment practices liability, environmental and workers’ compensation insurance policies, which we believe are customary for
businesses of our size and type. Pursuant to the terms of their franchise agreements, our 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.
Competition
The foodservice industry, and particularly the QSR industry, is intensely competitive with respect to price, quality, name
recognition, service and location. We compete against other QSRs, including chicken, hamburger, pizza, Mexican and sandwich
restaurants, other purveyors of carry-out food and convenience dining establishments, including national restaurant and grocery
chains. Many of our competitors possess substantially greater financial, marketing, personnel and other resources than we do.