Dive Brief:
- Popeyes franchisee, Sailormen, filed for Chapter 11 bankruptcy protections on Thursday, according to court filings. Sailormen operates 136 Popeyes restaurants in Florida and Georgia.
- The franchisee reported over $223 million in sales, but had a net operating loss of over $18 million in 2025, David Baker, chief restructuring officer and managing partner at Aurora Management Partners, said in the court filing. As of Jan. 12, it had over $232 million in assets and over $342 million in liabilities.
- Sailormen experienced various challenges within the past 12 months, including the trailing impact of the COVID-19 pandemic, changes in consumer habits, inflation, increased rates for borrowing and “limited qualified labor force.”
Dive Insight:
For the first three quarters of 2025, Popeyes posted negative same-store sales, which likely added pressure to its franchisees. Popeyes is working on improving its brand performance through its “Easy to Run” initiative, which includes remodels and improvements to operations. But it is coming too late for franchisees like Sailormen already facing compounding financial issues.
Prior to filing for bankruptcy, the chain attempted to sell 16 restaurants to help improve its financial performance and to stabilize the business. That sale fell through and Sailormen remained liable for lease guarantees, the filing states. The franchisee has since fallen behind on rent payments to several landlords. The company also holds a significant unpaid principal loan balance of over $112 million, as well as over $17 million in accrued interest and fees.
On Dec. 5, 2025, BMO Bank, its largest lender, filed a complaint in New York seeking a federal receiver that would ultimately displace management and appoint a receiver with the right to control the business and assets of Sailormen. That action pushed the franchisee to file for Chapter 11 as it believes that “the Debtor, creditors and estate will fare far better in a chapter 11 case with the Debtor remaining a debtor-in-possession acting as a fiduciary for the benefits of all creditors and parties in interest, and not just for the benefit of the Lenders,” Baker wrote.
Chapter 11 will also allow Sailormen to remain operational as long as it is allowed to use lenders’ cash collateral and the franchisor makes concessions through the closing of a sale, Baker said.
“The Debtor believes that those funds, along with cash-on-hand and revenue generated from its ongoing business, will provide the stability and liquidity needed to achieve a successful result in this Chapter 11 Case through a sale process,” Baker wrote.
While Sailormen is the first franchisee to file for bankruptcy protections this year, it certainly isn’t alone in its financial troubles. Several franchisees have faced similar challenges, especially as the industry continues to face declines in same-stores sales and traffic. Last year, a Del Taco franchisee, Matadoor Restaurant Group, filed for bankruptcy protections following sales struggles and rising operating costs. Del Taco took over and reopened 17 units after a Colorado franchisee filed for Chapter 11 and closed 18 of its stores. Burger King franchisee Consolidated Burger Holdings also filed for bankruptcy following various profitability issues.
