January 1, Major Burger Chain Files for Chapter 11 Amid Post-Pandemic Economic Struggles

The number of restaurant chains that have filed for bankruptcy this year grew on Wednesday as BurgerFi International sought Chapter 11 protection.

BurgerFi announced it initiated Chapter 11 reorganization to “preserve the value” of its well-known BurgerFi and Anthony’s Coal Fired Pizza & Wings brands “for all stakeholders.” Only the company-owned locations, which consist of 17 BurgerFi and 50 Anthony’s restaurants, are part of these proceedings.

BurgerFi’s petition was lodged in the U.S. Bankruptcy Court for the District of Delaware.

Chief Restructuring Officer Jeremy Rosenthal attributed the company’s Chapter 11 filing to a “drastic decline in post-pandemic consumer spending amidst sustained inflation and increasing food and labor costs.” This statement highlights the undeniable impact of the current economic policies and mismanagement that have left many American businesses teetering on the edge.

In an effort to stay afloat, BurgerFi launched an extensive turnaround campaign last year. Despite these initiatives showing “early positive indicators,” CEO Carl Bachmann explained that “legacy challenges” ultimately pushed the company to file for bankruptcy.

BurgerFi’s filing revealed assets estimated between $50-$100 million and liabilities ranging from $100-$500 million. But, despite the grim figures, Rosenthal expressed confidence that the bankruptcy process would enable the company to “protect and grow our brands,” continue their operational turnaround, and secure additional capital.

Customers can rest assured that both corporate and franchised restaurants will remain open. Franchisees run 76 BurgerFi restaurants and one Anthony’s location, which are not affected by the bankruptcy proceedings.

BurgerFi isn’t alone in this struggle. Chains like Roti, Buca di Beppo, Rubio’s Coastal Grill, Red Lobster, and Tijuana Flats have also sought Chapter 11 bankruptcy this year. Just last week, Red Lobster received court approval to exit bankruptcy, a glimpse of hope that with effective management and strategy, recovery is possible.

Jonathan Carson, co-CEO of bankruptcy services and technology firm Stretto, revealed that 17 operating companies and large franchisees in the restaurant industry have already filed for Chapter 11 this year. This trend underscores the ongoing economic hardships faced by businesses under the current administration’s policies.

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