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Franchisee Fights for $2.5M Deposit After Buyer Bails
18 Sep
Summary
- Bankrupt Popeyes franchisee is suing an investment firm for $2.5 million.
- The firm abandoned a deal to buy nearly two dozen Popeyes restaurants.
- A new buyer later agreed to purchase the locations for $2.7 million.
Sailormen Inc., a Popeyes franchisee operating over 136 locations, has sued RFI Ventures in U.S. bankruptcy court. Sailormen, which filed for Chapter 11 bankruptcy in January, is seeking to keep a $2.5 million deposit from RFI Ventures after the firm abandoned an agreement to buy 23 Orlando-area restaurants.
Initially, RFI Ventures agreed to purchase these locations for approximately $2.5 million as part of a larger auction involving 97 of Sailormen's restaurants. Following RFI's withdrawal, Sailormen sought court permission to continue managing the restaurants while seeking a new buyer. In July, SBH Foods PLK, another Popeyes franchisee, agreed to acquire the 23 locations for $2.7 million, moving the bankruptcy sale forward.
Sailormen argues that the $2.5 million deposit is property of the bankruptcy estate and that RFI's withdrawal was contractually unsupported. The franchisee cited rising operational costs and changing consumer behavior as challenges leading to its financial struggles. In March, 20 of its restaurants closed.
