If you’re wondering how this happens and how you can get into the rent-a-recipe business, it helps to know that the company that owned the recipes was started by the chain’s founder, Al Copeland, in 1984. Diversified Foods and Seasonings is a separate entity that sells most of the food that a Popeyes franchisee needs, from biscuit mixes to chicken batter to premade soups and macaroni and cheese.
In 1994, the company filed for bankruptcy and reorganized, and Copeland was ousted from the company he founded. He got to keep some Popeyes franchises…and DFS, the company with the contract to supply Popeyes restaurants with, well, food and seasonings. The recipe royalty was actually a “spice royalty” for the rights to use the recipes for those spice blends and mixes.
DFS still holds the exclusive contract to supply spice mixes and other products to Popeyes franchisees, but the company now owns its recipes. The $43 million figure was calculated based on the amount that Popeyes would have paid in royalties for the next 15 years.
Popeyes Buys Its Recipes for $43 Million. Wait, Popeyes Didn’t Own Its Recipes? [Bloomberg Businessweek]