Popeyes Is Closing These 3 Stores in 2024 (Due to Bankruptcy)

We’ve heard of big names like JCPenney, RiteAid, and Bed Bath & Beyond declaring bankruptcy, but did you know that several restaurants have also gone under recently?

Many companies that hold multiple franchises are struggling due to inflation, dwindling customer numbers, and rising costs — and Popeyes Chicken is the latest of them.

While the overarching Popeyes company is still intact, RRG Inc. — a franchisee that runs 17 Popeyes stores — filed for bankruptcy in Georgia in February 2024. 

While not all the details are publically known, the franchisee owners Mark and Jane Rinna divulged that they plan to close three underperforming Popeyes stores in an attempt to salvage the more promising ones.

Here’s what this means for the quick-service restaurant industry, what the future holds for the Popeyes brand, and whether you can still get your beloved Popeyes chicken.

Popeyes managed to edge out KFC's spot as the second-most popular fast-food chicken restaurant in the U.S. It still trails behind Chick-fil-A, which has the largest market share of the chicken eateries at 45%. 

This is quite a feat considering that Popeyes is the youngest company among the three chicken giants, founded in a New Orleans suburb in 1972.

It didn't even offer a chicken sandwich until 2019. Its release quickly led to a public Twitter spat between the Louisiana-inspired chain and Chick-fil-A. 

As a result, many followers decided to try the new entree, leaving several Popeyes stores sold out of chicken sandwiches.

Despite Popeyes' relative success, the chain has recently lost market share. According to Barclays data, it has decreased from 15% to 11.9% in the last year, while KFC's market share dropped to 11.3%.

RRG blames its financial problems on three stores that are dragging down the performance of its portfolio. The company shared the following in its Chapter 11 bankruptcy filing:

“Debtor is filing bankruptcy as a result of failing locations. Debtor has approximately three Popeyes restaurants that have significantly lost money and caused a financial burden on the continued operation of the remaining restaurants. Debtor has fallen behind on lease payments of remaining profitable restaurants and needs to cure those arrearages to avoid lease termination."

While we know that the problematic stores are located in Georgia, we do not have information on which ones they are. Popeyes currently operates 174 stores in Georgia.

Frequently referred to as “reorganization bankruptcy,” Chapter 11 doesn’t mean the company goes out of business or has to sell off its assets.

Chapter 11 is used to restructure debts and get the company on track to becoming profitable again. Once the business is reorganized, it must keep to the plan to meet all of its financial obligations or it could face liquidation

The three underperforming stores have saddled RRG with debt, most notably $238,595 in lease payments that have fallen behind. 

The company also owes $120,086 in credit card debt to American Express and over $68,000 in property taxes. RRG is closing the unprofitable stores to preserve capital and cash flow for the viable ones.

Unfortunately, RRG isn’t alone in its bankruptcy. Numerous other restaurant franchisees are also going belly-up. 

Franchise owners of Wendy’s, Hardee’s, Denny’s, Burger King, and an additional Popeyes franchisee have joined the ranks of fast-food restaurants that filed Chapter 11 in the past year.

Franchisees have struggled with the aftermath of COVID-19, which included changed customer habits, increased inflation, high borrowing costs, and a limited labor force. 

We may see several more restaurant franchisees struggle as the dust from the inflationary spike and the pandemic continue to settle.

Even though a few franchisees have run into trouble, Popeyes fans won’t need to worry about the company going under; it’s slated for growth overall during the coming years.

In a press release, Restaurant Brands International CEO Josh Kobza (the company that owns Popeyes) gave guidance that the company plans to grow from 3,200 stores (its number in 2023) to 4,200 stores in the U.S. and Canada by 2028. 

So don’t worry—your spicy Louisiana chicken isn’t going anywhere.

Although the news of closing stores and struggling franchisees isn’t great, Popeyes fans need not be discouraged. The company continues to gain market share, even with tight competition from other chicken and fast-food restaurants.

Despite a few Georgia Popeyes stores closing, the chain intends to open many others in the coming years, growing its footprint and providing delicious Louisiana-inspired chicken to happy customers. 

So grab your favorite cash back credit card and head to Popeyes today!