Key Takeaways
- Bankrupt Popeyes franchisee Sailormen is suing to keep RFI Ventures’ $2.5 million escrow payment, arguing the buyer lacked contractual grounds to abandon its deal for 23 Orlando-area restaurants.
- Sailormen later secured a $2.7 million offer from existing Popeyes operator SBH Foods PLK, potentially giving the franchisee $5.2 million if the bankruptcy court awards it RFI’s deposit.
- The dispute comes as Sailormen dismantles a network of more than 130 restaurants after entering Chapter 11 with roughly $130 million in debt and closing or selling locations across Florida and Georgia.
A bankrupt Popeyes franchisee found a new buyer for 23 restaurants after its original deal collapsed—and now it wants to keep the first buyer's $2.5 million, too.
According to Nation’s Restaurant News, Miami-based Sailormen Inc. is suing RFI Ventures in federal bankruptcy court after the investment firm backed out of an agreement to acquire nearly two dozen Popeyes locations around Orlando.
RFI had already placed $2.5 million into escrow for the transaction. Sailormen argues that money was a deposit, the buyer had no contractual basis to walk away, and the entire amount should now belong to its bankruptcy estate.
The restaurants themselves aren't sitting without a buyer. After RFI bailed, Sailormen kept the 23 locations operating while searching for someone else to take them. In July, existing Popeyes franchisee SBH Foods PLK stepped in with a $2.7 million offer—about $200,000 more than RFI had agreed to pay.
SBH had already struck a separate deal to acquire five Sailormen restaurants in the Savannah, Georgia, market.
That replacement deal didn't end the fight with RFI.
"Because RFI tendered the purchase price as a deposit in consideration for Sailormen's extension of the closing date and attempted to justify its nonperformance through newly asserted and contractually unsupported grounds for termination, Sailormen is entitled to retain those funds," Sailormen argued in court documents.
The $2.5 million battle is the latest twist in what has become a sprawling breakup of one of Popeyes' biggest franchise operations. Sailormen entered Chapter 11 in January carrying roughly $130 million in debt and more than 130 restaurants, largely concentrated in Florida and Georgia.
The company said rising operating expenses and changing consumer behavior had hammered traffic and left the decades-old franchise operation under mounting financial pressure.
Then came the sell-off.
By March, 20 Popeyes restaurants had closed as Sailormen began dismantling its portfolio. By June, buyers had been lined up for 97 locations, with restaurants divided among several operators. Pulse Restaurant Group—a company established by Sailormen CEO David Damato—emerged as one of the major buyers, alongside 61 Biscuits LLC and other Popeyes operators.
But not every restaurant found a landing spot. Dozens initially failed to attract bids, forcing Sailormen to seek court approval to reject leases and close additional locations. Popeyes itself also agreed to acquire some restaurants as the bankruptcy reshuffled a franchise network Sailormen had been building since 1984.
The Orlando restaurants escaped that fate when SBH came forward. Now Sailormen is trying to turn RFI's failed purchase into another multimillion-dollar recovery for creditors.
If the bankruptcy court sides with Sailormen, the franchisee would receive $2.7 million from the eventual sale of the 23 Popeyes restaurants while holding onto the $2.5 million tied to the deal that fell apart—making the abandoned transaction potentially worth nearly as much as the replacement sale.
