Three years ago, as the COVID-19 pandemic began to grip the world, we were told to brace ourselves for the “new normal.” But nobody could have predicted the challenges that independent restaurant owners, like the renowned celebrity chef and “Restaurant Hustle” participant Antonia Lofaso, would face. As the world enters its fourth year in the post-pandemic era, the restaurant industry continues to grapple with uncertainty.
In late February 2023, a staggering 92% of restaurant operators, surveyed by the National Restaurant Association, voiced their concerns about the impact of inflation, particularly the skyrocketing costs of food procurement. These restaurateurs also cited higher interest rates, making it increasingly difficult for them to manage their finances, and a shrinking pool of willing workers. But these woes are not exclusive to independent eateries alone.
Enter Restaurant Brands International (RBI), the parent company of four major quick-service restaurant chains, including Burger King, Tim Horton’s, Firehouse Subs, and Popeyes. Since the dawn of 2023, three franchisees within RBI’s expansive system have declared bankruptcy, as reported by Restaurant Dive. The first two casualties were the mammoth Burger King franchisees, Toms King and Meridian Restaurants Unlimited. The latest addition to this disheartening list is a Popeyes franchisee known as Premier Cajun Kings LLC (PCK).
On March 14, PCK submitted a Chapter 11 bankruptcy reorganization petition in an Alabama federal court, a grim testament to their struggles. But the tale of PCK’s bankruptcy is a tragic one, beginning with the untimely demise of its owner, Manraj “Patrick” Sidhu. Sidhu, who graduated from Punjab University in 1997, founded PCK in 2018. Initially, the company started with just six restaurants in the Birmingham, Alabama area, eventually expanding to 30 locations across Alabama, Georgia, and Tennessee. With nearly 400 employees, PCK saw sales amounting to $30 million in 2020 and 2021.
However, Sidhu was no stranger to the world of fast-food franchising. In 2010, he ventured into the business by acquiring multiple Burger King locations through the PCK affiliate, Premier Kings, which, remarkably, continues to operate today. In 2018, he further diversified his holdings by acquiring Qdoba Mexican Grill and Hummus & Pita Co. locations. It’s worth noting that this diversification might have marked the beginning of his troubles, as by 2021, the last Hummus & Pita outlet had shuttered its doors.
Tragically, less than a year later, on May 24, 2022, Sidhu passed away, with the cause of death remaining undisclosed. Shortly after, on June 2, Sidhu’s estate enlisted the services of Aurora Management Partners Inc., a financial consulting and advisory firm, to guide PCK through what would undoubtedly be a tumultuous transition. Sidhu’s passing was a significant blow since he was the sole owner and key management figure of PCK.
In the aftermath of Sidhu’s death, PCK found itself hemorrhaging cash, as stated in a March 14 declaration filed in Alabama federal court by David Baker, Managing Director of Aurora Management Partners Inc. In an attempt to curtail mounting losses due to poor performance, PCK reluctantly made the painful decision to shutter ten Popeyes restaurants across Alabama and Tennessee. Adding to their woes, an 11th location lost its lease through an eviction proceeding initiated by the landlord. This left PCK’s portfolio of Popeyes restaurants reduced by a third by March 14, 2023, the day the company filed for bankruptcy.
Despite these desperate measures, the closures failed to bring stability to PCK’s business amidst the challenges posed by post-pandemic economic realities, coupled with the loss of their visionary leader. Facing mounting pressure from landlords, vendors, and its secured lender, PNC Bank, PCK had no recourse but to seek bankruptcy protection under Chapter 11 of the Bankruptcy Code, as declared by Baker.
Chapter 11 provides a lifeline for companies, offering them an opportunity to restructure their debts and chart a path towards recovery. Though the hope for PCK lies in this avenue, the future may entail the sale of their Popeyes restaurants to another franchisee—a bittersweet ending to a chapter of resilience and hardship in the restaurant industry’s ongoing saga.