Former Popeyes Worker Awarded $31 Million in Lawsuit Against Sun Holdings

Dallas, Texas – A former employee of Sun Holdings, the operator of Popeyes restaurants, has been awarded nearly $31 million in damages by a jury. The employee, Jerry Stockton, claimed that he was owed a share of the restaurant’s profits. The jury initially awarded $15.6 million in compensatory damages, followed by an additional $15.1 million in punitive damages.

Stockton, who had worked for Sun Holdings as the director of operations and vice president of operations for their Popeyes locations, retired in 2018. He filed a lawsuit a year later, alleging that he was entitled to 5% of the operating profits as the “key operator” of the restaurants. Stockton claimed that he was encouraged to delay taking his share until his retirement and that his requests for the operating profits were repeatedly denied by Guillermo Perales, the owner of Sun Holdings.

Perales, however, disputed Stockton’s claims, stating in an interview that he had not promised Stockton 5% of the operating profits. He argued that the confusion stemmed from a section in the franchise agreement, which states that a “key operator” is entitled to 5% of the profits. Perales emphasized that this provision is intended for investor-owned franchises, whereas Sun Holdings is solely owned by him. Additionally, Perales contended that the $31 million award failed to consider certain costs such as interest and rent.

Daniel Charest, an attorney representing Stockton, expressed satisfaction with the jury’s decision, stating that they rightly recognized Stockton had been defrauded by Perales. Perales, on the other hand, plans to appeal the jury’s ruling.

Sun Holdings is a major franchisee that operates multiple brands, including Burger King, Arby’s, Applebee’s, IHOP, Papa John’s, and Popeyes. The $31 million award stems from a 38% profit margin for the restaurants, without factoring in certain costs.

The legal battle between Stockton and Sun Holdings sheds light on the intricacies of franchise agreements and the potential for disputes over profit distributions. It underscores the importance of clearly defining the rights and obligations of all parties involved.

As this case unfolds, the outcome could have significant implications for other franchise operators and their employees. It remains to be seen how the legal system will ultimately resolve the dispute and whether it will set a precedent for similar cases in the future.