UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 15, 2010
AFC Enterprises, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
000-32369 | 58-2016606 | |
(Commission File Number) | (IRS Employer Identification No.) |
5555 Glenridge Connector, NE, Suite 300, Atlanta, Georgia | 30342 | |
(Address of Principal Executive Offices) | (Zip Code) |
(404) 459-4450
(Registrants Telephone Number, Including Area Code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On July 15, 2010, AFC Enterprises, Inc. (the Company) entered into a Royalty and Supply
Agreement (the Agreement) with Diversified Food and Seasonings, Inc. (Diversified) pursuant to
which the Company agrees to utilize Diversified and to require its franchisees to utilize
Diversified as the supplier of certain agreed upon core products (Core Products). The term of
the Agreement commences on July 15, 2010 and continues until March 20, 2029 (the Term). The
Agreement also provides for the grant by Diversified to the Company of an exclusive,
non-transferable license during the Term to use the recipes or formulas used by Diversified for the
preparation of the Core Products (the Popeyes Formulas) in connection with the operation of
Popeyes restaurants by the Company and its franchisees by virtue of having the right to use
products made in whole or in part with a Popeyes Formula by Diversified. The Company agrees to pay
a royalty payment during the Term for the exclusive use of the Popeyes Formulas. The Agreement provides that
Diversified will be the exclusive provider of the Core Products for the Company and its franchisees
(a) during the Term, in the continental United States and
(b) until December 31, 2015, in certain international markets,
including United States military bases, Canada and the islands of the
Caribbean (together the Domestic Markets).
Pursuant to the Agreement, the Company and Diversified agree that effective as of July 15,
2010, all of the agreements among the Company and Diversified and their predecessors in interest
(the Prior Agreements) are terminated in their entirety, except for an obligation by the Company
to pay to Diversified the unpaid and accrued portion of the royalty payment under such agreements.
These agreements include, among others, the following material agreements: (a) the Formula
Agreement dated July 2, 1979 among Alvin C. Copeland, Gilbert E. Copeland, Mary L. Copeland,
Catherine Copeland, Russell J. Jones, A. Copeland Enterprises, Inc. and Popeye Famous Fried
Chicken, Inc.; (b) the Supply Agreement dated March 21, 1989 between New Orleans Spice Company,
Inc. and Biscuit Investments, Inc.; (c) the Recipe Royalty Agreement dated March 21, 1989 among
Alvin C. Copeland, New Orleans Spice Company, Inc. and Biscuit Investments, Inc. and (d) the
Settlement Agreement among Alvin C. Copeland, Diversified, Flavorite Laboratories, Inc. and the
Company dated May 29, 1997, each of which was previously filed as an exhibit to the Companys
Registration Statement on Form S-4/A (Registration Statement No. 333-29731) on July 2, 1997 and
each of which is incorporated herein by reference.
The Agreement provides that until December 31, 2010, Diversified will continue to fill orders
from the Company or its franchisees for products currently supplied by Diversified in and outside
the Domestic Markets at the current pricing as of the date of the
Agreement, and that until December
31, 2011, at the Companys request, Diversified will continue to fill orders from the Company or
its franchisees for products currently supplied by Diversified
outside the Domestic Markets at the current pricing as of the date of
the Agreement. The Company must give Diversified 90 days notice of
its intent to stop buying products with respect to each jurisdiction outside the Domestic Markets.
The Agreement provides that until December 31, 2014, Diversified will be the exclusive
supplier to the Company and its franchisees in the Domestic Markets of certain currently supplied
sauces at the current pricing as of the date of the Agreement.
The Agreement provides that the supply of any products other than the Core Products and sauces
will be subject to a competitive bidding process and that the Company will offer Diversified a fair
and reasonable opportunity to bid on the supply of such products.
The Agreement provides that the prices for the Core Products will be reduced 3% per year on January
1 of each year until and including January 1, 2014 and that the prices for flour-based Core
Products will be adjusted every six months based upon an agreed upon
flour index. The Company intends to seek confidential treatment from the Securities
and Exchange Commission for certain portions of the Agreement, including the pricing schedule for
the Core Products, in connection with the filing of the Agreement as an exhibit to the Companys
Quarterly Report on Form 10-Q for the period ended September 30, 2010.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth above under Item 1.01 Entry into a Material Definitive Agreement
in incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AFC Enterprises, Inc. |
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Date: July 21, 2010 | By: | /s/ Harold M. Cohen | ||
Harold M. Cohen | ||||
Senior Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary |