Rising costs, declining traffic and mounting debt contributed to the restructuring
Credit: Popeyes
NEED TO KNOW
- Additional Popeyes closures bring bankruptcy-related total to about 20 restaurants
- Major franchisee Sailormen filed Chapter 11 with roughly $130 million debt
- Company operated more than 130 locations across Florida and Georgia
More Popeyes restaurants have closed as fallout continues from the bankruptcy of one of the chain’s largest franchise operators.
A March 10 court filing obtained by PEOPLE revealed that three additional locations in Georgia have shuttered, bringing the total number of closures tied to the case to about 20. The restaurants were operated by Sailormen Inc., a Miami-based franchisee that filed for Chapter 11 bankruptcy protection in January.
Before the filing, Sailormen oversaw more than 130 Popeyes restaurants across Florida and Georgia.
Credit: Joe Raedle/Getty
According to Fast Company, the company already closed 17 restaurants in January as part of the restructuring process. The three newest closures reported in the March filing seeking to reject leases on those properties, pushed the total number of shuttered locations higher.
The bankruptcy filing cited a combination of economic pressures, including rising inflation, declining customer traffic and mounting debt of roughly $130 million.
PEOPLE reached out to Popeye's and Sailormen Inc. and have yet to receive a response from either.
Sailormen has operated Popeyes locations since the late 1980s and once built one of the largest franchise portfolios in the chain’s system. But in recent years the company struggled with higher operating costs, legal disputes with lenders and a failed attempt to sell some of its restaurants, according to coverage from Restaurant Business Online.
Chapter 11 bankruptcy allows companies to reorganize financially while continuing to operate, meaning many of Sailormen’s remaining locations are expected to stay open as the restructuring process continues.
The closures also come amid broader competition across the fast-food chicken category, where major chains are battling for customers in what some industry observers have called a renewed “chicken wars” era, as explained by Fast Company.
For now, the future of more than 100 remaining restaurants in the franchisee’s portfolio remains uncertain as the bankruptcy proceedings move forward.
Read the full article here