Sailormen, a 136-unit Popeyes franchisee, filed for bankruptcy in Florida.
• A large Popeyes franchisee based in Miami filed for bankruptcy January 15, citing more than $342 million in debt.
• Sailormen Inc. in court documents said a dispute with another franchisee over the failed sale of several restaurants affected the company's financial performance.
A botched transaction between Popeyes franchisees in the southern United States and mounting debt led to a Miami-based franchisee filing for bankruptcy protection this week.
Sailormen Inc. filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of Florida January 15. The 136-unit Popeyes franchisee reported liabilities of more than $342 million and a net operating loss last year of nearly $19 million, according to court documents.
Sailormen formed in 1984 as an 11-unit Popeyes franchisee in Miami. Through acquisitions and new developments, Sailormen grew its portfolio to 136 restaurants in Florida and Georgia. At one point the franchisee owned locations in other states, but between 2012 and 2018 it sold off its units in Illinois, Missouri, Louisiana, Alabama and Mississippi to focus on growth in Georgia and Florida, according to Sailormen’s bankruptcy declaration.
The franchisee, owned by Nevada-based Interfoods of America, reported $233 million in sales, which accounted for a net loss of nearly $19 million, per court documents.
Neither Sailormen CEO David Damato nor Popeyes corporate provided comment for this story.
As of January 12, Sailormen’s assets totaled $232 million, while its liabilities amounted to $342 million. In the bankruptcy declaration, Sailormen’s Chief Restructuring Officer David Baker wrote that a large part of that debt is owed to BMO Bank; the unpaid principal loan balance is more than $112 million, plus another $17 million in interest and fees.
Sailormen ranked No. 68 last year on the Franchise Times Restaurant 200 list of the largest restaurant franchisees in the U.S. with nearly $250 million in system sales.
Related: Seasoned Popeyes Franchisee Signs 15-Unit Agreement in Boston
Sailormen made the “difficult decision” in 2023 to sell 16 restaurants in Georgia to Tar Heels Spice to “improve its financial performance and stabilize the business,” according to court documents. But the deal fell through when Tar Heels failed to meet its obligations under the purchase agreement, so Sailormen sued the group for damages in August 2024.
Per the deal, Tar Heels was supposed to pay $1 million for the stores and assume all obligations for the restaurants. Sailormen loaned Tar Heels $400,000 as part of the transaction, secured by assets related to the 16 locations, according to the complaint.
While Tar Heels funded an operating account with the required $1 million, it didn’t give Sailormen proper access to it to pay the assumed liabilities, which required Sailormen to pay landlords, employees and vendors directly, the complaint alleged.
After doing so for two months, Sailormen stopped making rent payments on the restaurants and subsequently received default notices. Some landlords sued the franchisees for rent backpay, according to the complaint.
Sailormen claimed that Carl McManus, the head of Tar Heels, withdrew “hundreds of thousands of dollars from the operating account for his personal use,” per court documents.
McManus in April 2025 filed for Chapter 7 bankruptcy and, since then, Sailormen and Tar Heel’s case has been idle, according to court records.
In December, BMO sued Sailormen in the Southern District of New York and motioned to appoint a federal receiver, “which would, among other things, displace management of Sailormen and provide the appointed receiver with the sole right to control the business and assets,” Baker wrote in the declaration. “Facing increased pressure from landlords, vendors and BMO,” Sailormen filed for bankruptcy to preserve its assets and “maximize its value for the benefit of creditors and other parties in interest.”
Sailormen’s stores can stay in operation if the court grants the use of cash collateral, Baker wrote. “Those funds, along with cash-on-hand and revenue generated from its ongoing business, will provide the stability and liquidity needed to” to successfully restructure the organization.