A Popeyes franchisee declared bankruptcy Tuesday, due primarily to COVID pressures and the death of its owner. It's now hoping to initiate a sales process.
Premier Cajun Kings was founded in 2018 by Manraj "Patrick" Sidhu. It began with six restaurants in or around Birmingham, Alabama. Twenty-four more stores were bought in Alabama, Georgia, and Tennessee between 2018 and 2019. In 2020 and 2021, the company achieved more than $30 million in annual sales and employed nearly 500 workers.
In May 2022, Sidhu passed away unexpectedly, which "triggered great operational instability," court documents state. He was the sole member and manager of the company. Premier Cajun King has also suffered from high inflation, higher borrowing rates, and an increasingly limited qualified labor force. Because of low performance and growing losses, The company shuttered 10 stores in Alabama and Tennessee. An 11th unit was evicted by the landlord. But the moves haven't been enough.
"Facing increased pressure from landlords, vendors, and its secured lender, the Debtor has no choice but to seek relief in this Court in order to reorganize its business in chapter 11," court documents state.
As of Tuesday, Premier Cajun Kings operates 19 stores pursuant to a limited license agreement negotiated with Popeyes before court proceedings. The two sides entered the deal with the understanding that a sales process would happen and that a buyer would enter into a new franchise agreement.
Last year, Premier Cajun Kings earned $26 million in sales and swung a net operating loss of $6.8 million. The company has $10 million in assets and $20.1 million in liabilities. It owes roughly $8.2 million in secured debt to PNC Bank.
It's the third bankruptcy in 2023 for RBI, parent of Burger King, Popeyes, Tim Hortons, and Firehouse Subs. Earlier in the year Burger King franchisees, 90-unit TOMS King and 120-unit Meridian Restaurants Unlimited declared bankruptcy. Both blamed COVID, including increased costs and labor issues and unrelenting liabilities.