Burger King franchisee files for bankruptcy after – Business News
The proprietor of 57 Burger King eating places filed for bankruptcy, blaming high labor prices and inflation for forcing his company to go below, in accordance with court docket paperwork.
Consolidated Burger Holdings – one of Burger King’s largest franchisees – – owes practically $37 million to collectors and filed for Chapter 11 bankruptcy safety on Monday.
It is looking for to sell its belongings by a court-supervised course of.
A significant Burger King franchisee that runs 57 eating places filed for bankruptcy on Monday. Christopher Sadowski
“Recent increases in costs of shipping and food, decreased availability of labor and inflation” worsened points for the franchisee, stated Joseph Luzinski, the company’s chief restructuring officer.
The company’s eating places are positioned within the Florida Panhandle, together with 9 areas in Tallahassee, and southern Georgia.
Several massive Burger King franchisees have filed for bankruptcy over the previous few years, nonetheless reeling from the COVID-19 pandemic and sticky inflation, which decimated foot visitors and gross sales at fast-food chains.
Consolidated Burger Holdings’ bankruptcy is the outcome of “significant foot traffic and revenue declines without a corresponding drop in rent costs, debt or other liabilities,” Luzinski stated in court docket paperwork.
The firm owes $36.64 million to much less than 1,000 collectors after working some shops at a loss, the bankruptcy paperwork stated.
In its most up-to-date fiscal 12 months, the franchisee reported gross sales of $67 million and a internet working loss of $12.5 million.
It suffered a $6.3 million loss in fiscal 12 months 2023, as nicely.
The franchisee is simply the most recent to file for bankruptcy as fast-food eating places are left reeling from the COVID-19 pandemic and sticky inflation. Christopher Sadowski
Burger King sued Consolidated Burger Holdings in January 2024, alleging the franchisee broke agreements to considerably rework and improve areas.
The two firms reached a settlement in September.
“The Burger King system is far stronger today because of our focus on great Franchisees who are committed to investing in their restaurants and teams for the long-term,” a Burger King spokesperson informed The Post in a assertion.
“This means a small number of franchisees who are no longer investing in their restaurants will be exiting the system. We are working quickly to get these restaurants transferred to high-performing operators.”
In court docket paperwork, the franchisee claimed it spent hundreds of thousands on upgrades and remodels throughout its Burger King shops.
The company has seen a number of different main Burger King franchisees file for bankruptcy within the aftermath of the pandemic.
Meridian Restaurants Unlimited, Toms Kings and Premier Kings all filed for bankruptcy in 2023. The three franchisees operated a mixed 378 Burger King areas.
