Popeyes Franchisee Sailormen Seeks Lease Rejections Amid Chapter 11 Restructuring

Sailormen Inc., the Miami-based Popeyes franchisee that once ran more than 136 locations across Florida and Georgia, filed a motion on March 10 to reject the unexpired leases on three additional closed restaurants in Brunswick, Baxley, and Homerville, Georgia, pushing the total number of closures tied to its ongoing Chapter 11 case to at least 20.

The motion adds to an earlier omnibus filing in which Sailormen sought to reject 17 closed leases after shuttering eight locations on January 19, five on January 20, and four more on January 22, all within days of its Chapter 11 petition, which was filed January 15 in the U.S. Bankruptcy Court for the Southern District of Florida in Miami. The company, represented by law firm Cole Schotz, argues the leases should be deemed rejected as of the petition date because the restaurants closed within one week of filing and before the hearing on its first-day motions.

The three newly targeted Georgia locations were already dark before Sailormen filed for bankruptcy. The Baxley property sits at 628 W. Parker St. Sailormen has not disclosed how many workers lost jobs as a result of the 20 closures, and as of this week it was not immediately clear whether additional restaurants would close. The company did not respond to requests for comment.

The scale of the restructuring is significant. Sailormen was founded in 1987 with 10 locations and grew into one of the largest domestic Popeyes franchisees. Employee figures differ by source: one count placed the workforce at about 2,900 at the company's peak, while Sailormen's own court filings reported just over 3,300 employees at the time of the petition, the vast majority hourly workers.

In court papers, Sailormen estimates that shedding the 20 unprofitable locations will reduce its selling, general, and administrative expenses by more than $1 million annually. The savings figure is modest against the company's broader debt load, which Fox Business reported at $129 million owed to lenders, while Restaurant Business put the total at roughly $130 million.

The path to this filing was years in the making. A 2023 deal to sell 16 Georgia restaurants to a company called Tar Heels Spice fell through, leaving Sailormen liable for those leases and prompting a lawsuit. Vendors compounded the pressure: an IT services company sued the franchisee for allegedly falling behind on payments dating back to 2022. Lenders had already initiated a prepetition receiver action before Sailormen sought court protection. The company cited the COVID-19 pandemic, high inflation, rising borrowing costs, labor shortages, and diminished foot traffic as contributing factors.

A creditor has filed a motion to compel lease rejection and turnover of possession, a sign that landlord disputes are likely to remain a focal point as the case proceeds. Sailormen's utilities motion, meanwhile, proposes adequate assurance procedures with a 10-day cure period and a deemed-consent provision for utilities that do not object at least two business days before the scheduled hearing. The first omnibus rejection motion requests a 30-day window after any court order for landlords to file rejection damages claims.

Popeyes' parent system issued reassurances. In an internal note to the Popeyes system, an executive identified as Perdue said "a large majority" of Sailormen's restaurants would remain open. "We are supporting them in every way we can through this process and believe in them as brand and operational leaders in our system," Perdue wrote, adding that the brand's fundamentals are in place and that it needs "more clear and consistent focus, not reinvention." That framing accompanied announcements of leadership team changes at the brand level.

Sailormen is a wholly owned subsidiary of Interfoods of America Inc. How many of its remaining locations survive the restructuring will depend on the outcome of negotiations with lenders over the reported $129 million to $130 million debt load, the resolution of outstanding lease disputes, and whether the reorganization plan the company eventually puts before the court can persuade creditors that the surviving footprint is worth preserving.