[[Image Removed: (POPEYES LOGO)]]

                                                  Oct. 4,       Dec. 28,
             Total Operating Restaurants as of:     2009          2008
             Domestic:
             Company-Operated                           37             55
             Franchised                              1,534          1,527
             International:
             Franchised                                347            340

             Total                                   1,918          1,922

Our Business Strategy
Our business strategy capitalizes on our strengths as a highly franchised restaurant system. Even in challenging economic times, this model provides diverse and reliable earnings and cash flows, with low capital spending demands. It efficiently produces sustainable cash flows which are available to enhance shareholder value. Additionally, this model provides the ability to expand the Popeyes system more rapidly than a capital intensive company-operated restaurant model.
Our strategy is based on the four pillars described below, and we continue to emphasize high quality food at compelling everyday value, speed of service, and improved restaurant profitability. We believe these proven strategies make us more competitive and better positioned for accelerated growth as the consumer environment improves.
• Build the Popeyes Brand - offer a distinctive brand and menu with clear competitive advantages.

• Run Great Restaurants - strengthen restaurant operations and improve the Popeyes guest experience by providing service as distinctive as our food.

• Strengthen Unit Economics - grow revenue and identify cost savings to improve food, labor and overhead efficiencies in the restaurants.

• Align People and Resources to Deliver Results - make investments in brand building, operational tools and people.

Management Overview of 2009 Operating Results (Third Quarter) Our third quarter of 2009 results and highlights include the following:
• Net income was $3.4 million, or $0.13 per diluted share, which included an expense of $1.9 million (negatively impacting diluted earnings per share by approximately $0.05), associated with the third amendment and restatement to the 2005 Credit Facility (discussed below).

• On August 14, 2009, the Company entered into a third amendment and restatement to the 2005 Credit Facility to, among other things, extend the maturity dates of its revolving credit facility and term loan by two years. For a discussion of the terms see "Long-Term Debt" within this Item 2.

• System-wide sales increased by 0.5% compared to flat sales in the third quarter of 2008.

• Global same-store sales decreased 0.3% compared to a decrease of 1.9% last year. Domestic same-store sales decreased 0.3% compared to a decrease of 2.8% last year and international same-store sales decreased 1.0% compared to an increase of 7.4% last year.

• The Popeyes system opened 21 new restaurants, offset by 8 permanent closings.

• The Company used its available cash to reduce its outstanding debt by $26.2 million to $88.6 million.

A summary of our financial results and key operational metrics is presented below.

                                                     12 Weeks Ended                        40 Weeks Ended
(Dollars in millions)                          10/04/09           10/05/08           10/04/09           10/05/08
Sales by company-operated restaurants         $     11.3         $     17.4         $     46.2         $     62.6
Franchise revenues (a)                              19.5               20.0               65.8               65.4
Other revenues                                       1.1                0.9                3.5                2.9

Total revenues                                $     31.9         $     38.3         $    115.5         $    130.9


Operating profit                              $      8.9         $      8.1         $     30.2         $     34.3
Net income                                    $      3.4         $      4.0         $     14.8         $     17.0

Global system-wide sales increase                    0.5 %              0.0 %              2.1 %              1.0 %

Same-store sales increase (decrease) (b)
Company-operated restaurant segment                  3.0 %             (6.1 )%            (0.6 )%            (5.5 )%
Domestic franchised restaurants                     (0.4 )%            (2.6 )%             1.2 %             (1.9 )%

Total domestic (company-operated and
franchised restaurants)                             (0.3 )%            (2.8 )%             1.1 %             (2.1 )%
International franchised restaurants                (1.0 )%             7.4 %              2.7 %              4.1 %

Total global system                                 (0.3 )%            (1.9 )%             1.3 %             (1.5 )%


Company-operated restaurants (all
domestic)
Restaurants at beginning of period                    37                 67                 55                 65
New restaurant openings                                -                  -                  -                  1
Unit conversions, net                                  -                (11 )              (16 )              (11 )
Permanent closings                                     -                  -                 (2 )                -
Temporary (closings)/re-openings, net                  -                  -                  -                  1

Restaurants at the end of third quarter               37                 56                 37                 56


Franchised restaurants (domestic and
international)
Restaurants at beginning of period                 1,868              1,834              1,867              1,840
New restaurant openings                               21                 28                 51                 96
Unit conversions, net                                  -                 11                 16                 11
Permanent closings                                    (8 )              (24 )              (59 )              (88 )
Temporary (closings)/re-openings, net                  -                  -                  6                (10 )

Restaurants at the end of third quarter            1,881              1,849              1,881              1,849


Total system restaurants                           1,918              1,905              1,918              1,905

(a) Franchise revenues are principally comprised of royalty payments from franchisees that are based upon franchisee sales. While franchisee sales are not recorded as revenue by the Company, we believe they are important in understanding the Company's financial performance and overall financial health, given the Company's strategic focus on growing its overall business through franchising. For the third quarter of 2009 and 2008, franchisee sales, as reported by our franchisees, were approximately $394.4 million and $386.6 million, respectively.

(b) Same-store sales statistics exclude temporarily and permanently closed restaurants and stores that have been open for less than 65 weeks.

In reviewing our operating results, we believe the following table can be helpful. The table presents selected revenues and expenses as a percentage of total revenues (or as a percentage of a corresponding revenue line item).

                                                    12 Weeks Ended                       40 Weeks Ended
                                              10/04/09          10/05/08           10/04/09           10/05/08
Revenues:
Sales by company-operated restaurants                36 %              46 %               40 %               48 %
Franchise revenues                                   61 %              52 %               57 %               50 %
Rent and other revenues                               3 %               2 %                3 %                2 %

Total revenues                                      100 %             100 %              100 %              100 %

Expenses:
Restaurant employee, occupancy and other
expenses (a)                                         52 %              56 %               52 %               52 %
Restaurant food, beverages and packaging
(a)                                                  33 %              34 %               33 %               35 %
Rent and other occupancy expenses                     2 %               1 %                2 %                1 %
General and administrative expenses                  38 %              33 %               37 %               31 %
Depreciation and amortization                         3 %               3 %                3 %                4 %
Other expenses (income), net                          0 %              (0 )%              (2 )%              (4 )%

Total expenses                                       72 %              79 %               74 %               74 %

Operating profit                                     28 %              21 %               26 %               26 %
Interest expense, net                                11 %               4 %                5 %                5 %

Income before income taxes                           17 %              17 %               21 %               21 %
Income tax expense                                    6 %               7 %                8 %                8 %

Net income                                           11 %              10 %               13 %               13 %

(a) Expressed as a percentage of sales by company-operated restaurants.

2009 Same-Store Sales - Third Quarter
Global same-store sales decreased 0.3% in the third quarter of 2009, as compared to the same period in 2008.
Domestic same-store sales decreased 0.3% in the third quarter of 2009, as compared to the same period in 2008. This decrease reflects positive transactions offset by a lower average check. In September 2009, we promoted our Bonafide® chicken featuring 5 wings for $2.99 and 11 pieces of bone-in chicken for $9.99. These promotions, which were supported by three weeks of national media advertising, delivered positive guest counts. According to independent data, Popeyes' domestic same-store sales continued to outpace the chicken QSR category for the sixth consecutive quarter. We remain focused on increasing traffic by offering compelling value, distinctive Louisiana food, and an improved guest experience.
International same-store sales decreased 1.0% compared to an increase of 7.4% last year. The elevated sales in the third quarter of 2008 were primarily related to restaurants in the Middle East which benefited from the timing of the Islamic holiday of Eid, marking the end of the fasting period of Ramadan. The third quarter same-store sales decrease in 2009 primarily reflects weaker sales in the Middle East due to economic slowdown. The franchisees in this region are addressing this trend by promoting value priced offerings.

Looking Forward to the Remainder of 2009 The Company's projection for global same-store sales for fiscal 2009 is at the lower end of the range of its previous guidance at 0.0% to positive 2.0%. The Company now expects its global new openings to be in the range of 100 to 110 restaurants, compared to previous guidance in the range of 90 to 110 restaurants. Due to the year-to-date restaurant closure rate, the Company now expects closures to be approximately 100 restaurants, compared to previous guidance of 110 to 120 restaurants. Net restaurant openings are now expected to be in the range of 0 to positive 10, compared to previous guidance of 0 to negative 30. Popeyes restaurant closures typically have sales significantly lower than the system average.
The Company expects fiscal 2009 general and administrative expenses to be consistent with its previous guidance of 3.1% to 3.2% of system-wide sales, among the lowest in the restaurant industry. The Company will continue to tightly manage its general and administrative expenses and invest in key strategic initiatives, including its continued commitment to national media advertising and operations improvements, which management believes are essential for the long-term growth of the brand.
Given the improved expectations for net restaurant openings, the Company expects 2009 earnings to be at the upper end of its guidance of $0.66 to $0.70 per diluted share.
Comparisons of the Third Quarter for 2009 and 2008 Sales by Company-Operated Restaurants
Sales by company-operated restaurants were $11.3 million in the third quarter of 2009, a $6.1 million decrease from 2008. The decrease was primarily due to:
• a $6.4 million decrease related to the re-franchising of 27 company-operated restaurants (11 in the Atlanta market during the third quarter of 2008, three in the Nashville market during the first quarter of 2009 and 13 in the Atlanta market during the second quarter of 2009) and the closure of three company-operated restaurants,

partially offset by:

• a $0.3 million increase due to a 3.0% increase in same-store sales in the third quarter of 2009.

After considering the effects of franchise fees and royalties, general and administrative savings, and lower depreciation and amortization, the third quarter operating profit impact of re-franchising the company-operated restaurants was unfavorable compared to 2008 by approximately $0.1 million. Franchise Revenues
Franchise revenues have three components: (1) ongoing royalty fees that are based on a percentage of franchisee sales; (2) franchise fees associated with new unit openings and renewals; and (3) development fees associated with the agreement pursuant to which a franchisee may develop new restaurants in a given market (usually paid at the inception of the agreement and recognized as revenue as restaurants are actually opened or the development right is terminated). Royalty fees are the largest component of franchise revenues, generally constituting more than 90% of franchise revenues.
Franchise revenues were $19.5 million in the third quarter of 2009, a $0.5 million decrease from 2008. The decrease was primarily due to a decrease in franchise and development fees, partially offset by an increase in royalty revenue from new franchised restaurants. Rent and Other Revenues
Rent and other revenues are principally composed of rental income associated with properties leased or subleased to franchisees. Other revenues were $1.1 million in the third quarter of 2009, a $0.2 million increase from 2008.

Restaurant Employee, Occupancy and Other Expenses Restaurant employee, occupancy and other expenses were $5.9 million in the third quarter of 2009, a $3.8 million decrease from 2008. This decrease was principally due to a reduction in the number of company-operated restaurants as discussed above. Restaurant employee, occupancy and other expenses were approximately 52% and 56% of sales from company-operated restaurants in the third quarter of 2009 and 2008, respectively. This improvement was primarily attributable to lower worker's comp expense, utility costs, other net operating costs, and the closure of underperforming restaurants. Restaurant Food, Beverages and Packaging Restaurant food, beverages and packaging costs were $3.7 million in the third quarter of 2009, a $2.2 million decrease from 2008. This decrease was principally due to a reduction in the number of company-operated restaurants as discussed above. Restaurant food, beverages and packaging costs were approximately 33% and 34% of sales from company-operated restaurants in the second quarter of 2009 and 2008, respectively. This improvement was primarily attributable to lower commodity costs and the re-franchising of company-operated restaurants.
Rent and Other Occupancy Expenses
Rent and other occupancy expenses were $0.6 million in the third quarter of 2009, a $0.1 million increase from 2008. General and Administrative Expenses
General and administrative expenses were $12.0 million in the third quarter of 2009, a $0.8 million decrease from 2008. The decrease was primarily due to:
• a $0.9 million net decrease due to the lower national media and other advertising expenses within the quarter, and

• a $0.5 million net decrease in other general and administrative costs,

partially offset by:

• a $0.6 million increase in bad debt expense.

General and administrative expenses were approximately 38% and 33% of total revenues in the third quarter of 2009 and 2008, respectively. General and administrative expenses were approximately 3.0% and 3.2% of system-wide sales in the third quarter of 2009 and 2008, respectively. Depreciation and Amortization
Depreciation and amortization was $0.9 million in the third quarter of 2009, a $0.4 million decrease from 2008. The decrease was principally due to the sale and re-franchising of 27 restaurants (11 during the third quarter of 2008, three during the first quarter of 2009 and 13 during the second of 2009). Other Expenses (Income), Net
Other expenses (income), net was $0.1 million of income in the third quarter of 2009. A schedule of the components of other expenses (income), net can be found at Note 7 to our condensed financial statements at Part 1, Item 1 to this quarterly report.
Interest Expense, Net
Interest expense, net was $3.5 million in the third quarter of 2009, a $1.9 million increase from 2008 primarily due to the $1.9 million expensed in connection with the third amendment and restatement of the 2005 Credit Facility. A schedule of the components of interest expense, net can be found at Note 9 to our condensed financial statements included at Part 1, Item 1 to this quarterly report.

Income Tax Expense
Income tax expense was $2.0 million in the third quarter of 2009 as compared to $2.5 million in 2008. Our effective tax rate in the third quarters of 2009 and 2008 was 37.0% and 38.5% respectively. The effective tax rate differs from statutory rates due to adjustments to estimated tax reserves, non-deductible goodwill impairments, other permanent differences and inter-period allocations. Comparisons of the Forty Weeks Ended October 4, 2009 and October 5, 2008 Sales by Company-Operated Restaurants
Sales by company-operated restaurants were $46.2 million in the forty weeks ended October 4, 2009, a $16.4 million decrease from 2008. The decrease was primarily due to:
• a $17.1 million decrease related to the re-franchising of 27 company-operated restaurants (11 in the Atlanta market during the third quarter of 2008, three in the Nashville market during the first quarter of 2009 and 13 in the Atlanta market during the second quarter of 2009) and the closure of three company-operated restaurants, and

• a $0.3 million decrease due to a 0.6% decrease in same-store sales,

partially offset by:

• a net $1.0 million increase due to the timing of temporary restaurant closures during 2009 and 2008.

After considering the effects of franchise fees and royalties, general and administrative savings, and lower depreciation and amortization, the operating profit impact of re-franchising the company-operated restaurants was favorable to the forty weeks ended October 4, 2009 compared to 2008 by approximately $1.2 million.
Franchise Revenues
Franchise revenues were $65.8 million in the forty weeks ended October 4, 2009, a $0.4 million increase from 2008. The increase was primarily due to an increase in royalty revenue resulting from positive same-store sales and royalties from new franchised restaurants, partially offset by a decrease in franchise and development fees.
Rent and Other Revenues
Rent and other revenues were $3.5 million in the forty weeks ended October 4, 2009, a $0.6 million increase from 2008, primarily as a result of an increase in the number of leased or subleased properties, including sublease rental revenue associated with certain of the restaurants which were re-franchised. Restaurant Employee, Occupancy and Other Expenses Restaurant employee, occupancy and other expenses were $24.2 million in the forty weeks ended October 4, 2009, an $8.7 million decrease from 2008. This decrease was principally due to a reduction in the number of company-operated restaurants as discussed above. Restaurant employee, occupancy and other expenses were approximately 52% of sales from company-operated restaurants in both the third quarter of 2009 and 2008. Restaurant Food, Beverages and Packaging Restaurant food, beverages and packaging costs were $15.3 million in the forty weeks ended October 4, 2009, a $6.4 million decrease from 2008. This decrease was principally due to a reduction in the number of company-operated restaurants as discussed above. Restaurant food, beverages and packaging costs were approximately 33% and 35% of sales from company-operated restaurants in the forty weeks ended October 4, 2009 and October 5, 2008, respectively. This improvement was primarily attributable to lower commodity costs and the re-franchising of company-operated restaurants.

Rent and Other Occupancy Expenses
Rent and other occupancy expenses were $1.9 million in the forty weeks ended October 4, 2009, a $0.2 million increase from 2008. General and Administrative Expenses
General and administrative expenses were $42.9 million in the forty weeks ended October 4, 2009, a $2.5 million increase from 2008. The increase was primarily due to:
• a $0.6 million increase due to $2.1 million net of national media advertising expenses, partially offset by non-recurring marketing expenses incurred during 2008,

• a $1.4 million increase in personnel expense, primarily related to employee incentive accruals, and

• a $0.9 million increase in bad debt expense,

partially offset by:

• a $0.4 million net decrease in other general and administrative costs.

General and administrative expenses were approximately 37% and 31% of total revenues in the forty weeks ended October 4, 2009 and October 5, 2008, respectively. General and administrative expenses were approximately 3.1% and 3.0% of system-wide sales in the forty weeks ended October 4, 2009 and October 5, 2008, respectively.
Depreciation and Amortization
Depreciation and amortization was $3.6 million in the forty weeks ended October 4, 2009, a $1.4 million decrease from 2008. The decrease was principally due to the sale and re-franchising of 27 restaurants (11 during the third quarter of 2008, three during the first quarter of 2009 and 13 during the second quarter of 2009).
Other Expenses (Income), Net
Other expenses (income), net was $2.6 million of income in the forty weeks ended October 4, 2009, as compared to income of $5.1 million in 2008. The $2.6 million of income in 2009 resulted primarily from a net gain on sale of assets. The $5.1 million of income in 2008 resulted primarily from recoveries of insurance claims partially offset by impairment charges. A schedule of the components of other expenses (income), net can be found at Note 7 to our condensed financial statements at Part 1, Item 1 to this quarterly report. Interest Expense, Net
Interest expense, net was $6.5 million in the forty weeks ended October 4, 2009, a $0.2 million increase from 2008. The increase results primarily from the $1.9 million expensed in connection with the third amendment and restatement of the 2005 Credit Facility, partially offset by lower average debt balances and lower average interest rates on debt as compared to 2008. A schedule of the components of interest expense, net can be found at Note 9 to our condensed financial statements included at Part 1, Item 1 to this quarterly report. Income Tax Expense
Income tax expense was $8.9 million in the forty weeks ended October 4, 2009 as compared to $11.0 million in 2008. Our effective tax rate in 2009 and 2008 was 37.6% and 39.3% respectively. The effective tax rate differs from statutory rates due to adjustments to estimated tax reserves, non-deductible goodwill impairments, other permanent differences and inter-period allocations. Liquidity and Capital Resources
We finance our business activities primarily with:
• cash flows generated from operating activities, and

• borrowings under the 2005 Credit Facility, as amended and restated.

Our franchise model provides reliable and stable cash flows. Net cash provided by operating activities of the Company was $19.1 million and $23.2 million for the forty weeks ended October 4, 2009 and October 5, 2008, respectively. See our condensed statements of cash flows in our condensed financial statements included in Part 1, Item 1 to this quarterly report. Based primarily upon our generation of cash flow from operations, our existing cash reserves ($5.0 million available as of October 4, 2009), and available borrowings under our 2005 Credit Facility, as amended and restated ($46.5 million available as of October 4, 2009), we believe that we will have adequate cash flow to meet our anticipated future requirements for working capital, including various contractual obligations and expected capital expenditures.
Due to the continuing challenges of the financial and credit markets, which have affected franchisees throughout the industry, we increased our reserve for bad debt expense related to franchise revenues by an additional $0.8 million during the quarter.
During the third quarter, the Company received a payment of $10.2 million under the terms of a receivable which was recorded as a component of "Non-current notes receivable and other long-term assets, net" in the condensed balance sheet as of July 12, 2009. During the second quarter of 2009, the Company realized $7.1 million in combined cash proceeds from the re-franchising of 13 company-operated restaurants in the Atlanta, Georgia market and the sale of nine properties in the Texas market. These proceeds were used to make debt prepayments during the third quarter of 2009.
Our cash flows and available borrowings allow us to pursue our growth strategies. Our priorities in the use of available cash are:
• reinvestment in our core business activities that promote the Company's strategic initiatives,

• reduction of long-term debt, and

. . .