Two Major Restaurant Chains File for Bankruptcy Amid Economic Challenges

Clear Facts

• BurgerFi International has filed for Chapter 11 bankruptcy.
• The bankruptcy filing includes corporate-owned BurgerFi and Anthony’s Coal Fired Pizza & Wings restaurants.
• BurgerFi cited post-pandemic consumer spending decline, inflation, and rising costs as reasons for the filing.

The list of restaurant chains that have sought bankruptcy protection this year has grown, with BurgerFi International being the latest to file for Chapter 11.

The company announced that it took this step to “preserve the value” of its BurgerFi and Anthony’s Coal Fired Pizza & Wings brands “for all stakeholders.”

This bankruptcy filing pertains solely to the corporate-owned locations of these brands, which include 17 BurgerFi and 50 Anthony’s Coal Fired Pizza & Wings restaurants.

BurgerFi submitted its petition to the U.S. Bankruptcy Court for the District of Delaware.

Chief Restructuring Officer Jeremy Rosenthal explained that the decision to file for Chapter 11 was driven by a “drastic decline in post-pandemic consumer spending amidst sustained inflation and increasing food and labor costs.”

In an effort to turn the business around, BurgerFi initiated a comprehensive strategy last year.

CEO Carl Bachmann noted that “legacy challenges” also played a role in the bankruptcy filing, despite seeing “early positive indicators of the turnaround plan initiated less than a year ago.”

In its court documents, BurgerFi estimated its assets to be between $50-$100 million, while its liabilities ranged from $100-$500 million.

Rosenthal expressed confidence that the bankruptcy process “will allow us to protect and grow our brands and to continue the operational turnaround started less than 12 months ago and secure additional capital.”

During this period, customers can expect both corporate and franchised restaurants to remain operational. Franchisees currently run 76 BurgerFi restaurants and one Anthony’s location.

This year has seen several other restaurant chains, including Roti, Buca di Beppo, Rubio’s Coastal Grill, Red Lobster, and Tijuana Flats, file for Chapter 11 bankruptcy.

Just last week, Red Lobster received court approval to exit bankruptcy.

Jonathan Carson, co-CEO of bankruptcy services and technology firm Stretto, mentioned that 17 operating companies and large franchisees in the restaurant industry have filed for Chapter 11 so far this year.

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