Second Quarter 2009 Highlights compared to Second Quarter 2008:    --  Net income was $6.4 million, or $0.25 per diluted share, compared to       $6.6 million, or $0.26 per diluted share, last year.  Excluding the       impact from other non-operating income, net income was $4.7 million,       or $0.18 per diluted share, compared to $4.3 million, or $0.17 per       diluted share, last year.     --  System-wide sales increased by 4.9 percent compared to an increase of       1.5 percent last year.     --  Global same-store sales increased 4.3 percent compared to a decrease       of 1.4 percent last year.  Domestic same-store sales increased 4.3       percent compared to a decrease of 1.7 percent last year.        International same-store sales were positive for the eleventh       consecutive quarter, with an increase of 3.9 percent compared to an       increase of 1.7 percent last year.     --  The Company opened 16 restaurants and closed 22 restaurants, resulting       in net closings of 6 restaurants.  At the end of the second quarter of       2009, total unit count was 1,905 compared to 1,901 at the end of the       second quarter last year.     --  The Company completed the re-franchising of 13 restaurants in the       Atlanta market and sold 9 properties in the Texas market.  The Company       received $7.5 million in combined net proceeds and recognized a net       gain of $2.8 million during the quarter from these activities.     --  Year-to-date, the Company generated $14.7 million of free cash flow,       compared to $16.8 million during the same period last year.  AFC's       free cash flow computation and reconciliation to GAAP measures are       described in detail under the heading "Use of Non-GAAP Financial       Measures."   

AFC Enterprises Chief Executive Officer Cheryl Bachelder stated, "In the second quarter, we moved aggressively to grow our market share by giving our guests what they want from us - superior Louisiana food with compelling value. Our decision to use national media to deliver our message drove ad awareness increases of 14 percentage points over a year ago, bringing positive traffic increases to our restaurants. As a result, our second quarter same-store sales performance was strong, and our earnings performance year-to-date is on track. This was accomplished in the face of the weakest QSR traffic quarter since the second quarter of 2001 and significant new product activity from our competition. Going forward we will continue to implement the strategic plan that has led to these results."

   Strategic Plan Update   1. Build the Popeyes Brand    --  During the second quarter Popeyes promoted its famous and favorites       Bonafide(TM) bone-in chicken and Louisiana tenders at compelling price       points for both its single and family-user.  In the first week of its       second quarter, the Popeyes system promoted "Popeyes Pay Day."  This       national one-day promotion featured 8-pieces of Popeyes signature       Bonafide(TM) chicken for only $4.99.  These promotions, which were       supported with seven weeks of national media advertising, delivered       strong positive guest counts, resulting in positive same-store sales       for the quarter.  Throughout 2009, Popeyes will continue to offer       compelling value with an emphasis on its distinctive Louisiana food.    2. Run Great Restaurants   --  Popeyes continues to see improvement in its guest experience       monitoring (GEM) survey, with Overall Delighted scores up more than 3       percentage points from the end of the first quarter, and more than 14       percentage points since the implementation of the program last year.    --  At the end of June, Popeyes restaurant operators purchased and       installed new equipment to improve drive-thru times for its guests -       headsets and timers.  The Company is also rolling out training and       tools to facilitate speed of service initiatives.    3. Grow Profitability   --  The Company remains committed to finding ways to lower restaurant       operating costs and improve profitability while maintaining excellent       food quality for its guests.       --  During the second quarter, Popeyes restaurants benefited from           lower commodity costs, with year-over-year improvement of           approximately 4 percent.  The Company expects to see additional           commodity cost savings in the second half of 2009, as it laps           record highs from last year.       --  Additionally, the Company has completed a full diagnostic analysis           of its supply chain system and has identified further cost savings           that are expected to benefit the system in 2010 and beyond.    --  The Company continues to focus on readying restaurant operators and       identifying market opportunities, so the Popeyes system will be ready       to accelerate new unit development with quality operators and sites as       the credit markets recover.    4. Align People and Resources to Deliver Results    --  Popeyes re-franchised the remaining 13 company-operated restaurants in       the Atlanta market and recorded net proceeds of $3.5 million.   

Second Quarter Financial Performance Review compared to Second Quarter Last Year

System-wide sales increased by 4.9 percent compared to an increase of 1.5 percent last year.

Global same-store sales increased 4.3 percent compared to a decrease of 1.4 percent last year. Domestic same-store sales increased 4.3 percent, compared to a decrease of 1.7 percent last year, driven primarily by positive transactions. During the second quarter, the system benefited by seven weeks of national media advertising. International same-store sales were positive for the eleventh consecutive quarter, with an increase of 3.9 percent compared to an increase of 1.7 percent last year.

Total revenues were $35.7 million compared to $39.3 million last year. Total revenues were lower primarily due to the Company's successful re-franchising of 27 company-operated restaurants in the Atlanta and Nashville markets. Lower revenues were partially offset by an increase in franchise royalty revenue as a result of positive same-store sales.

After considering the effects of franchise fees and royalties, general and administrative savings, and lower depreciation and amortization, the second quarter impact of re-franchising the company-operated restaurants was favorable to operating profit by approximately $0.9 million.

Company-operated restaurant expenses for food, beverages and packaging as a percentage of sales were 33.3 percent compared to 35.1 percent last year. This improvement was primarily attributable to commodity cost improvements and the re-franchising of company-operated restaurants. Restaurant employee, occupancy and other expenses as a percentage of sales were 53.2 percent, flat compared to last year.

General and administrative expenses were $13.2 million or 3.1 percent of system-wide sales, compared to $11.5 million or 2.8 percent of system-wide sales last year. The increase was primarily attributable to the Company's $1.4 million investment in national media advertising and accruals for incentive compensation payments to employees.

Other income was $2.9 million, compared to $3.8 million of other income last year. In 2009, other income primarily included the net gain associated with the sale of 9 properties in the Texas market.

Year-to-date, EBITDA was $24.0 million, at 28.7 percent of total revenues, compared to $29.9 million, at 32.3 percent of total revenues, last year. This decrease was primarily due to $3.0 million for the Company's investment in national media advertising and a $2.6 million variance in other income, due primarily to non-operating net gains from property sales, impairments and insurance settlements. AFC's EBITDA computation and reconciliation to GAAP measures is described in detail under the heading "Use of Non-GAAP Financial Measures."

Interest expense, net was $1.3 million, compared to $1.9 million last year. This decrease reflects lower average interest rates and lower average debt balances in the second quarter of 2009.

The Company's effective income tax rate was 36.6 percent, compared to an effective tax rate of 40.0 percent in the prior year. The effective rate last year was higher due to non-deductible goodwill impairments.

Net income was $6.4 million, or $0.25 per diluted share, compared to $6.6 million, or $0.26 per diluted share, last year. Excluding other non-operating income, net income was $4.7 million, or $0.18 per diluted share, compared to $4.3 million, or $0.17 per diluted share, last year.

Year-to-date, the Company generated $14.7 million in free cash flow, compared to $16.8 million during the same period last year. AFC's free cash flow computation and reconciliation to GAAP measures is described in detail under the heading "Use of Non-GAAP Financial Measures."

In the second quarter of 2009, the Company opened 16 restaurants globally, including 5 domestic and 11 international, compared to 32 restaurant openings during the same period last year. As planned, the Company's 22 restaurant closures in the second quarter exceeded openings, but were lower compared to last year's closure of 31 restaurants. Closures consisted of 9 domestic restaurants and 13 international restaurants.

On a system-wide basis, Popeyes had 1,905 restaurants operating at the end of the second quarter of 2009, compared to 1,901 restaurants last year. Total unit count was comprised of 1,568 domestic restaurants and 337 international restaurants in 26 foreign countries and two territories. Of this total, 1,868 were franchised restaurants and 37 were company-operated restaurants.

Amendment to 2005 Credit Facility

On August 14, 2009, AFC Enterprises completed an amendment and restatement of its 2005 Credit Facility to extend the maturity dates of its revolving credit facility and term loan and to make other changes described herein. The maturity dates for the revolving credit facility and the term loan have been extended for two years to May 2012 and to May 2013, respectively. The amended facility also provides the Company greater financial flexibility with its Total Leverage Ratio covenant which will remain at 3.00 to 1.00 until May 2012 and 2.75 to 1.00 thereafter.

The Company reduced its outstanding term loan from $110.5 million to $103.5 million and the revolving credit facility commitment from $60 million to $48 million. Based on the Company's available borrowings and the strong cash flow generation from operations, management believes it has adequate cash flow to meet its anticipated future requirements. The rate of interest for borrowings under the credit facility, as amended, is LIBOR plus 4.50 percent, with a minimum LIBOR of 2.50 percent. To reduce interest rate risk, derivative instruments are required on no less than 30 percent of the outstanding debt within 30 days of the amendment date.