Fast casual chain BurgerFi has filed for Chapter 11 bankruptcy after several months of reporting financial distress with the Florida based chain hemorrhaging money.
Yet another big food chain is in big trouble, with BurgerFi the latest casualty in the kitchen.
Fort Lauderdale-based BurgerFi International now joins the likes of Buca di Beppo, World of Beer, and Red Lobster who have all filed for Chapter 11 bankruptcy protection in a year of tough business conditions that has been hitting fast casual chains hard this year.
BurgerFi filed for bankruptcy protection in the U.S. District Court for the District of Delaware, sparking fears of mass closures and job losses at the chains restaurants across the country including here in Florida.
BurgerFi which also owns Anthony's Coal Fired Pizza, has a total of 93 BurgerFi restaurants, with 76 franchised and 17 corporate-owned. Coal Fired Pizza has 51 restaurants, with 50 corporate-owned and one dual-brand franchise location in Kissimmee.
The Chapter 11 filing includes only the 67 corporate-owned locations of the two chains, not franchisee-owned sites
BurgerFi has been in financial trouble for month, issuing a warning in August that the company was running out of cash and that it may need to file for bankruptcy in the future.
Bosses said they had just $4.4 million in the bank as of August 14, with losses for the second quarter expected to be a whooping $18.4 million.
According to the bankruptcy filing Wednesday, BurgerFi estimates it had between $100 million and $500 million in liabilities, but only $50 million to $100 million in assets.
The company has stressed that all of its corporate locations will operate normally for now, although they are planning to get out of leases for its worst performing restaurants in a bid to cut costs and clear debts. and has hired a chief restructuring officer to oversee this.
“In the face of a drastic decline in post-pandemic consumer spending amidst sustained inflation and increasing food and labor costs, we need to stabilize the business in a structured process,” said Jeremy Rosenthal, chief restructuring officer, in a statement. “We are confident that this 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.”
If the restaurant operator doesn't "receive adequate relief from its senior lender and additional sufficient liquidity ... or from sales of the company’s assets to meet its current obligations, it may seek protection under applicable bankruptcy laws," BurgerFi said in its filing
The chain is also considering selling some of its holdings or the entire company.
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