Lawful and Ethical Business Dealings
The globalization of American business has resulted in an array of regulations and laws with which Popeyes® Louisiana Kitchen, Inc. (PLKI) must comply.
PLKI will not tolerate bribery of any kind. We comply with all regulations regarding franchise sales and relationships, and we verify the right to work of all prospective employees.
PLKI will not tolerate bribery of any kind. Bribery is illegal whether you are a United States citizen or not and whether your activity happens in the U.S. or elsewhere. As a company doing business abroad, PLKI is also subject to the Foreign Corrupt Practices Act (FCPA), which is designed to prevent the bribery of foreign officials by U.S. citizens and companies, to improve record-keeping and internal accounting controls in order to detect illegal payments and to maintain public confidence in the integrity of the American business system.
- Any action that could be considered an improper or illegal payment or bribe of any official or private individual either in the United States or abroad is strictly prohibited, including, but not limited to, those activities covered by the FCPA.
- PLKI maintains complete and accurate records of all transactions.
As a result: PLKI employees and agents are prohibited from offering or giving anything of value to any foreign officials to:
- Influence them in an official capacity
- Secure any improper advantage
- Cause them to influence the foreign government in order to obtain or retain business
The term “improper advantage” refers to something to which the Company was clearly not entitled, for example, an operating permit for a factory that fails to meet the statutory requirements. The law defines the term “foreign official” broadly to include officers or employees of a foreign government, its departments, agencies or instrumentalities, as well as any person acting in an official capacity or on behalf of any government. The definition includes a member of a legislative body or a royal family. It also includes officials or employees of public international organizations, such as the United Nations, or persons acting in an official capacity on behalf of such an organization. The term “foreign official” has been interpreted to include directors, officers or other officials of state-owned or controlled business enterprises (e.g., a national oil company or national airline).In addition:
- PLKI employees and agents who are foreign nationals may be prosecuted if some element of the illegal activity occurred within the United States.
- PLKI foreign affiliates and/or employees can be held liable, including our foreign agents, foreign subsidiaries and their non-U.S. citizen employees.
- PLKI can also be prosecuted for any bribery activity taking place wholly outside the U.S.
- Corrupt payments through third-party intermediaries, such as agents or joint venture partners, are unlawful.
Note: The FCPA accepts “grease payments,” defined as “facilitating payments” for “routine government action,” such as:
- Obtaining permits, licenses or other official documents
- Processing governmental papers, such as visas and work orders
- Providing police protection, mail pick-up and delivery, phone service, and power and water supply
- Loading and unloading cargo or protecting perishable products
- Scheduling or inspections associated with contract performance or transit of goods across the country
- Proposed payments of any kind to any foreign official should be reviewed by the Legal Department.
- If the payment is lawful under the written laws of the foreign country, it may be permitted.
- If the payment is for a reasonable and bona fide expense for promoting, demonstrating or explaining products or services or performing a contractual obligation, it may also be permitted.
- Business hospitality, such as travel and lodging for foreign officials, may be appropriate.
The FCPA requires companies to have stock registered with the Securities and Exchange Commission (opens in new window) (SEC) to maintain records that accurately reflect the assets of the company and the disposition of company funds. These companies must:
- make and keep books, records and accounts, which, in reasonable detail, accurately and
- fairly reflect the transactions and dispositions of assets of the company and
devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that:
- all transactions are executed in accordance with management’s general or specific authorization
- transactions are recorded as necessary to permit preparations of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets
- access to assets is permitted only in accordance with management’s general or specific authorization
- the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Federal Trade Commission (FTC) and state laws and regulations govern the sale of franchises and regulate franchise relationships.Franchise Sales Regulation
Policy: Domestically, PLKI complies with the FTC Rule on Franchising and various state franchise registration and disclosure laws. PLKI issues a detailed disclosure document each year, which is generally referred to as the Franchise Disclosure Document (FDD), formerly known as the Uniform Franchise Offering Circular. PLKI files the FDD with several states prior to initiating franchise sales in those states.
If PLKI intends to terminate or not renew a franchise, it generally must have good cause and provide advance written notice, which ranges from 10 days to 120 days.
Internationally, PLKI also complies with the franchise registration and/or disclosure laws of other countries. PLKI issues separate disclosure documents for each of the countries that require pre-sale registration and/or disclosure. PLKI also complies with the laws in those countries that require good cause and advance notice of termination and/or nonrenewal.
As a result: At the earliest of the first face-to-face meetings between PLKI and a prospective franchisee or 10 business days (14 calendar days in Illinois) before the prospective franchisee pays any money to PLKI or signs any contract with PLKI, or as otherwise required by the state or country at issue, PLKI provides each prospective franchisee with a FDD or international disclosure document containing detailed information about PLKI, the franchise system, the required investment and the contracts that will be signed.
- Prospective PLKI franchisees receive signature copies of all franchise contracts at least five business days, or as otherwise required by the country at issue, before they are signed.
- PLKI employees will not make oral or written representations, especially financial projections, that are not contained in the FDD.
- All PLKI FDD’s are delivered to meet the deadlines mandated by the FTC or the relevant state or country.
- PLKI FDD’s are generally valid for one year except in the event of a material change, in which case PLKI will update the FDD.
PLKI’s obligations vary by state and country, but often also include:
- limitations on our refusal to approve proposed transfers
- rights granted to franchisees to form franchisee associations
- restrictions on our ability to discriminate among similarly situated franchisees
Policy: As mandated by the Immigration and Naturalization Service (INS), PLKI will not hire any candidate for employment in the United States without first verifying that person’s right to work in the U.S.
As a result: PLKI employees who make hiring decisions in the United States must:
- Verify the identity and eligibility of a person to work
- Complete INS Form I-9 (opens in new window) (Employment Eligibility Verification)
- Keep the I-9 for three years from the date of the hire or one year after the date of termination, whichever is longer
In addition: In Form I-9, the employee represents that he/she is:
- A citizen or national of the United States
- An alien lawfully admitted for temporary or permanent residence and an alien lawfully authorized by the INS or Attorney General to work in the United States
- The employee attests that he/she has presented genuine documents to evidence his/her identity and employment eligibility.
- The PLKI employee responsible for making the hiring decision must examine the documents, determine that they appear genuine and relate to the employee and attest that, to the best of his/her knowledge, the person is authorized to work in the United States.
The U.S. antitrust laws are among the most significant laws governing business. Their goal is to maximize consumer welfare by encouraging ample supply and competitive pricing. They impact our relationships with competitors, franchisees, consumers, suppliers and vendors.
Policy: We comply with all antitrust laws and regulations.
Penalties: Violations of antitrust laws are very serious matters. In addition to PLKI liability, there is criminal and personal liability for such violations, including prison time and very substantial fines as well as treble damages, for employees involved in a violation.
Virtually any agreement between competitors—stated, implied or assumed—relating to prices, excluding other companies, or dividing markets or customers is unlawful. Discussions between competitors, however innocent or public the information, may later be cited as evidence of collusion.
Policy: Employees who come in contact with employees or agents of other restaurant companies should never discuss:
- Current or future prices, whether for products, services or intellectual property
- Marketing or promotional programs
- Development plans
- New products
- Any other matter involving competition of any kind
For example: Discussing the success of a $3.99 combo promotion with a competitor, followed by the competitor’s adoption of the same promotion, could be evidence of price-fixing. The less specific the discussions, the less likely that antitrust issues will arise.
Our Franchise Agreement governs most aspects of our relationships with our franchisees.
Policy: PLKI employees who interact with franchisees should know and comply with the PLKI Franchise Agreement and applicable laws and company policies.
Note: Special considerations may apply in situations where PLKI operates restaurants in close proximity to franchisees. Although our principal competition is other restaurant chains (i.e., interbrand competition), antitrust laws may apply to competition between PLKI restaurants in these instances (i.e., intrabrand competition).
For example: An PLKI-owned restaurant may not use its economic power to force a franchised restaurant in the same market out of business by price-cutting or other predatory conduct.
PLKI employees should strive to give consumers the best possible deal through rigorous competition.
Policy: PLKI employees should avoid any agreement with any outside person or entity other than PLKI that has the effect of limiting competition.
While adhering to antitrust laws, PLKI needs to purchase goods and supplies at terms as favorable as possible and by all means should negotiate for the best possible price.
Policy: PLKI will not charge different prices for the same product to similarly situated buyers or knowingly induce a seller to sell at a discriminatory price.
As a result: PLKI employees should:
- Seek a special purchase price only when there are efficiencies or other benefits to the seller such as volume purchases, long-term commitments, prompt payment terms or credit risk considerations; and
- Avoid price discrimination and other antitrust concerns such as “tying” (illegally conditioning the sale of one product on the purchase of another product) when selling, especially where PLKI is the sole supplier.
Note: PLKI employees should make certain there is a valid justification for limiting the source of products sold to franchisees. Such valid justifications include ensuring the secrecy of a proprietary recipe, maintaining the quality of a proprietary product (e.g., POPEYES® spice mix) and the absence of acceptable alternative supplies.
The United States laws and regulations on the export of goods, services and technology are principally based on two factors: the nature of each export and its destination and end use.Policy:
- PLKI adheres to all relevant export and re-export laws and regulations.
- PLKI contracts for foreign sales must include language to indicate our customers’ acknowledgment of their obligations to honor applicable U.S. export and re-export laws.
Some items may be exported from the United States only after applying for and receiving a license from one or more government agencies. Deciding whether an export requires a license requires reference to a fairly comprehensive list of product categories maintained by the Department of Commerce(opens in new window) (DOC).
Policy: PLKI complies with all federal, state and local regulations, promotes energy and natural resource conservation, and requires responsible environmental practices from all employees.
As a result: Employees must ascertain whether each PLKI export requires a license by referring to the DOC and, when necessary, submitting the appropriate DOC license application which is available from the DOC Bureau of Export Administration(opens in new window). For support with this process, please contact the Legal Department.
Goods or technology of United States origin are subject to U.S. re-export controls. An item, for example, exported from the United States to Germany may not require a license, but its onward shipment from Germany to Indonesia might require prior DOC authorization. Although it is basically the responsibility of the foreign recipient to obtain the re-export authorization, PLKI could be held liable in some instances for illegal re-exports.
As a result: Employees must determine whether re-exports require prior DOC authorization and notify our customers, suppliers and distributors of such requirements.
The Treasury Department’s Office of Foreign Assets Control (opens in new window) (OFAC) maintains a list of embargoed countries, including lists of companies established in non-embargoed countries that are deemed to be under the control of embargoed governments, and administers United States embargo and sanction regulations.
As a result: Employees must comply with all current United States embargoes or comprehensive economic sanctions programs by referring to the OFAC.
Violation can result in severe criminal and civil penalties, including imprisonment, for PLKI and the employees involved.
All shipments into the United States are subject to U.S. Customs Service import requirements. As an importer, PLKI uses “reasonable care” in providing information to Customs, such as entry documentation, regarding the declared value and classification of our merchandise. The Customs website (opens in new window) and regulations (19 C.F.R. Parts 1 to 192) provide guidance on how to comply with these obligations and determine the proper value and classification of goods.Policy:
- We adhere to all relevant Customs, FDA and EPA laws and regulations in the valuation and classification of imported goods.
- We retain import records for five years.
A. Duty Rates
Import duty rates depend on several factors, including value, classification and country of origin.
As a result: Employees must:
- Route any classification ruling request through the Legal Department
- Determine the conditions of sale that must be included or excluded from the reported value of merchandise in order to calculate an accurate ad valorem duty rate
- Consult the Harmonized Tariff Schedule of the United States in order to classify imports properly to calculate accurate tariffs
- Determine countries of origin and their impact on the duty rate for all imports
B. Product Markings
Every article of foreign origin, or its container, imported into the United States must be conspicuously marked with the English name of the country of origin of the article, except for:
- Articles incapable of being marked
- Articles that cannot be marked except at an economically prohibitive expense
- Articles for which the marking of the containers will reasonably indicate the country of origin
As a result: Even where articles are excepted from the marking requirement, the outermost container or holder must be marked with the country of origin unless it also meets an exception. The Customs Regulations provide guidance on marking requirements at 19 C.F.R. Part 134.
For more information:
Foreign countries or groups of countries may, from time to time, refuse to do business with other countries (or their companies or citizens). United States companies may not support or participate in such “boycotts” unless the U.S. government also approves. Thus, the United States supports the United Nations sanctions against Iraq, but is opposed to the Arab League boycott against Israel. United States anti-boycott laws and regulations enforce U.S. companies’ nonparticipation in unapproved boycotts.
United States anti-boycott laws and regulations apply to all individuals and companies located in the U.S. and their foreign affiliates, and govern the sale, purchase or transfer of goods or services within the U.S. or between the U.S. and a foreign country.
Policy: We comply with all U.S. anti-boycott laws and regulations.
As a result: Employees acting on behalf of PLKI may not, contrary to United States law:
- Refuse to do business with countries subject to a foreign-imposed boycott (i.e. Israel) or with blacklisted companies (i.e. non-Israeli companies with which Arab league entities refuse to do business)
- Discriminate against other persons based on race, religion, sex, national origin or nationality
- Furnish information about the race, religion, sex or national origin of another person
In addition: Employees acting on behalf of PLKI:
- May not participate in any economic or other boycott contrary to U.S. anti-boycott laws and regulations
- Must report any such request to the Legal Department
- Must report any agreements, letters of credit, shipping instructions or other business documents that contain requests for information related to race, religion, national origin or other suspect factors to the Legal Department.
Violating U.S. anti-boycott laws may result in civil and criminal fines, imprisonment and denial of export privileges.
Insider trading involves the purchase or sale of securities while in possession of material nonpublic information (“inside information”) about a public company or its affiliates. It also involves disclosing or “tipping” inside information to others who purchase or sell PLKI securities. These activities violate PLKI and Restaurant Brands International (RBI) policy as well as U.S. and Canadian securities law.
The possession of material nonpublic information requires significant legal and ethical responsibilities not to profit from it and not to allow others to do so. Material information is that which would probably affect any investor’s decision to buy, sell or hold securities, or would affect the market value of the securities if publicly disclosed.
Examples of material information include:
- Dividend increases or decreases
- Earnings estimates or results, or a change in announced estimates
- Significant increase or decline in business or operations activities
- Stock splits or dividends
- Mergers or acquisitions
- Agreements to purchase or sell substantial assets
- Significant new products, services or discoveries
- Unusual or large borrowing
- Offerings or proposals to offer debt or stock securities for sale
- Commencement or settlement of a major claim or lawsuit
- Liquidity problems
- Significant management developments
All employees of PLKI are subject to the RBI Insider Trading Policy, which requires that any trade in securities of RBI be cleared prior to the trade taking place. The RBI Insider Trading Policy can be obtained from the Legal Department.
Penalties for insider trading can include both civil penalties of up to three times the profit gained or loss avoided, injunctions and forfeiture of profits; and/or criminal penalties up to $1 million and/or 10 years in prison for each violation. PLKI and its officers, directors and managers may also be subject to monetary civil and criminal penalties for employees’ insider trading violations.
RBI, the parent company of PLKI, has publicly traded common stock that requires us to make regular and timely filings to the SEC and the Canadian Securities Administrators (CSA).
Policy: We comply with all SEC rules, CSA rules and exchange rules regarding disclosure and communications for formal requirements and for material information, including the posting of PLKI information on any of our websites.
As a result: PLKI communications and finance employees will assist senior financial officers of RBI to:
- Determine if information is material, meaning if there is substantial likelihood that an investor would consider it important in making a decision to purchase or sell PLKI securities of RBI
- Make timely disclosures of material information
- Create periodic financial communications and reports (including reports to be filed with, or submitted to, the SEC) that are full, fair, accurate, timely and that are understandable so that readers and users will quickly and accurately determine their meaning and significance
- Ascertain that material posted to the website is free from misstatements and omissions and is treated in the same manner as press releases and other written communications
- Ensure that all materials posted to the website are accompanied by date of publication and appropriate disclaimers
- Determine the propriety of hyperlinks, which may be posted only when they will not cause any third-party information to be attributed to RBI and/or PLKI or deemed to have been adopted by RBI and/or PLKI
Possible consequences of failing to comply with disclosure standards include civil liability, criminal penalties, suspension of stock trading, injunctive remedies and disgorgement of any consequent profits.
A. Whistleblower Protection
REPORTING OF CONCERNS REGARDING ACCOUNTING, INTERNAL ACCOUNTING CONTROLS AND AUDITING MATTERS
In addition to an employee’s responsibility to report Honor Code concerns, all employees are required to report, or cause to be reported, information and should assist in any investigation by any regulatory or law enforcement agency, elected officials or others responsible for such matters concerning the following matters:
- Wire fraud, mail fraud, bank fraud, securities fraud, any violation of any SEC rule or regulation or any federal rules relating to fraud against shareholders
- Questionable accounting, internal controls and auditing matters
- Conduct that is not honest and ethical, conflicts of interest and disclosures that are not full, fair, accurate, timely and understandable
The Audit Committee of the Board of Directors of RBI has adopted a Whistleblower Policy (opens in new window) effective April 24, 2015, on the reporting of concerns regarding accounting, internal accounting controls and auditing matters. This policy is designed to provide a channel of communication for employees and others who have concerns about the conduct of RBI or PLKI or any of its people, including with respect to RBI or PLKI's accounting, internal accounting controls or auditing matters. The policy provides in pertinent part that RBI will not tolerate any discrimination, harassment of or retaliation against any employee who in good faith reports an actual or suspected violation of the policies and laws discussed in this Honor Code.
B. Waivers of the Honor Code
From time to time, PLKI may waive certain provisions of the Honor Code. Waivers for executive officers may be made only by the Board of Directors of RBI or a committee of the Board and will be appropriately disclosed. Any other employee or officer who believes that a waiver may be appropriate should discuss the matter with the RBI General Counsel.
The matters covered in the Honor Code are of the utmost importance to PLKI, its shareholders and its business partners, and are essential to PLKI’s ability to conduct its business in accordance with its core values. PLKI will take appropriate action against any officer, employee, agent, consultant, vendor or franchisee whose actions are found to violate these policies or any other policies of PLKI. Disciplinary actions may include immediate termination of employment or business relationship at PLKI’s sole discretion. Where PLKI has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, PLKI will cooperate fully with the appropriate authorities.