Major fried chicken franchisee shuts stores in bankruptcy filing

Economic headwinds have forced certain fried chicken fast-food restaurant franchisees to file for bankruptcy protection and close locations, despite the sector’s popularity.

Fried chicken dining chains were the most popular subsector of the fast-food industry in 2025, as traffic to chicken concepts had risen 3% for the year ending September 2025, while all concepts dropped 1% compared to the previous year, according to market research firm Circana, as reported by Fast Company.

A top Popeyes franchisee, however, didn’t benefit from the higher traffic trend and was forced to file for bankruptcy protection.

Popeyes franchisee shuts more locations

Major Popeyes fried chicken restaurant franchisee Sailormen Inc. has filed a motion to reject the unexpired leases of three more closed dining locations after already filing to reject 17 closed locations in Georgia and Florida.

Sailormen, which filed for Chapter 11 protection on Jan. 15, 2026, submitted a motion on March 10 to reject the unexpired leases of its Brunswick, Baxley, and Homerville, Ga., Popeyes locations, which it has closed.

The company didn’t reveal the number of layoffs as a result of the closings.

The debtor had already filed a motion in the U.S. Bankruptcy Court for the Southern District of Florida in Miami to reject 17 leases, after closing eight locations on Jan. 19, five locations on Jan. 20, and four locations on Jan. 22, according to court papers.

Sailormen asserts that the leases should be rejected as of the petition date, since the restaurants were closed within one week of the petition date and before the hearing on the debtor’s first-day motions.

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Closings could save $1 million a year

The Miami, Fla.-based wholly owned subsidiary of Interfoods of America Inc. believes that closing the 20 unprofitable locations will reduce the debtor’s selling, general, and administrative expenses by more than $1 million annually, according to court papers.

The debtor is removing equipment and other personal property from the locations to be reallocated or sold.

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Franchisee seeks sale of assets

Facing increased pressure from its landlords, vendors, and secured lender, Sailormen on March 13 filed a bidding and sale procedures motion with the bankruptcy court seeking a sale of its assets through a Section 363 auction.

Sailormen will seek a stalking-horse bidder to submit an opening bid, with its secured creditor allowed to credit-bid the prepetition debt owed to it.

The debtor filed for Chapter 11 bankruptcy due to significant challenges over the last year stemming from negative macroeconomic conditions.

Debtor faced economic challenges

Among the economic challenges it has faced are the lingering national impact of the Covid pandemic on its restaurant operations, consumer preferences, high inflation, rising interest rates, and a limited qualified labor force.

But fried chicken fast-food restaurants remain popular.

The variety of chicken options offered, such as chicken pieces, chicken fingers, or chicken sandwiches, and how consumers enjoy their choices, may contribute to the continued popularity of the concept, an expert said.

“This is due to the experiences the brands are creating as well as the variety of chicken and how you can enjoy it,” industry expert Reilly Newman of Motif Brands told The Food Institute. “This comes to no surprise, as the experience economy has been taking root across the globe.”

Sailormen filed for Chapter 11 protection after a failed sale of certain locations, a default on credit facilities, and a series of lawsuits and store closings caused the company financial distress.

Sailormen, which was founded in 1987 with 10 locations, was one of the largest domestic Popeyes franchisees in the company’s system, at one time operating more than 136 locations in Florida and Georgia with about 2,900 workers.