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A Popeyes Louisiana Kitchen franchisee that operates more than 130 locations filed for bankruptcy to rightsize itself after facing mounting debt.
Sailormen Inc., a Miami-based franchisee that operates locations in Florida and Georgia, filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida, according to its legal counsel.
The company, represented by Cole Schotz, is attempting to renegotiate or resolve the $129 million that it owes to lenders so it can emerge as a healthier franchisee.
The company blamed « various macroeconomic factors » for disrupting the business and forcing it to file for bankruptcy protection.
« Those factors include, among others, the national impact of the COVID-19 pandemic on restaurant operations, consumer choice, high inflation, increased borrowing rates and an increasingly limited qualified labor force, » according to the court documents.
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A customer orders food at a Popeyes restaurant in Austin, Texas. (Brandon Bell/Getty Images)
Popeyes Louisiana Kitchen Inc. is a subsidiary of Restaurant Brands International (RBI), which acquired the chain in 2017. But the majority of Popeyes locations are owned and operated by franchisees.
FOX Business reached out to Schotz and Restaurant Brands International for comment.
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Popeyes Louisiana Kitchen Inc. is a subsidiary of Restaurant Brands International. (Roberto Machado Noa/LightRocket via Getty Images)
This comes amid a string of eateries that have filed for bankruptcy in recent years. In fact, bankruptcy attorney Daniel Gielchinsky projected last year that a growing number of major restaurant chains will likely continue to file for bankruptcy protection over the coming years as the industry struggles to manage the heavy debt it accumulated during the COVID-19 pandemic.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| QSR | RESTAURANT BRANDS INTERNATIONAL INC. | 68.33 | -1.20 | -1.73% |
« Restaurants that exist today may not exist in five years. They’ll be off the map, » Gielchinsky told FOX Business in February 2025. Additionally, consumers will « see a lot of restaurants with a decreased footprint, » he added.
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The majority of Popeyes locations are owned and operated by franchisees. (Jeffrey Greenberg/Universal Images Group via Getty Images)
Several factors led to their downfall, according to Gielchinsky, founder and partner of South Florida-based DGIM Law. However, the COVID-19 pandemic was the catalyst, as the industry saw traffic decline significantly.
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Operators wanted to keep their doors open, so they had to cover costs like rent, insurance and payroll, even though customers weren’t coming in. To stay afloat, restaurants relied on government subsidies but also took out loans to fund business expenses. This meant that companies accumulated debt that they had to pay back over time plus interest.
