_edited.png)
Struggling Fast-Food Restaurant Chain Files Chapter 11 Bankruptcy.
A fast-food sandwich chain closed five locations and filed for bankruptcy to reorganize.
The fast-food restaurant industry still hasn't fully recovered from the COVID-19 pandemic that impacted the sector almost five years ago.
The list of fast-food restaurant chains and franchises that have faced economic hardship since the pandemic is lengthy. Operators of franchises such as Pizza Hut, Arby's, Popeyes, Starbucks, and Subway all make the list of chains that have filed for bankruptcy in the last year.
Popeyes franchisee RRG Inc., which operated 17 locations in Georgia, in February 2024 filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Georgia citing three underperforming locations for causing the company's distress.
Arby's franchisee Miracle Restaurant Group, which operated 25 units in Illinois, Indiana, Texas, Mississippi, and Louisiana, in June 2024 filed for Chapter 11 protection after the effects of the Covid-19 pandemic and the rising costs of products and labor expenses from inflation caused financial distress.
EYM, which operates 140 Pizza Hut locations in Texas, Wisconsin, and Ohio, filed its Chapter 11 petition in July 2024, since it didn't have enough capital to pay its franchise royalties to Yum Brands (YUM).
BurgerFi International, which operated 144 burger and pizza restaurants nationwide, on Sept. 11 filed for Chapter 11 protection to reorganize its business after its turnaround plan failed to produce the results it was expecting.
SouthRock Capital, a major fast-food franchise operator, based in São Paulo, Brazil, faced severe financial distress in 2023, forcing it to file bankruptcy in December 2023.
The franchisor operated 1,600 Subway, 187 Starbucks, and several other franchises in Brazil when it defaulted on a loan in September 2023, which led to the termination of its Starbucks franchise agreement. Subway followed with the termination of its agreements in November 2023.
Eegee's Closes Locations File Chapter 11 Bankruptcy.
And now, popular Arizona fast-food sandwich chain Eegee's filed for Chapter 11 bankruptcy on Dec. 6 with plans for a streamlined restructuring process after closing five locations.
The Tucson, Ariz.-based restaurant chain filed its petition in the U.S. Bankruptcy Court for the District of Arizona claiming it "encountered unprecedented challenges following the Covid-19 pandemic, as subsequent market conditions have created economic pressure throughout the restaurant industry," CEO Chris Westcott told KVOA-TV.
More bankruptcy stories:
"This restructuring will provide Eeegee's the opportunity to strengthen its operations while upholding the quality and service our customers know and love," Westcott said.
The debtor listed $10 million to $50 million in assets and liabilities in its petition.
Eegee's, which was founded in 1971, reportedly closed four locations in Tucson and one in Phoenix the day before it filed its petition. The sandwich chain continues operating 25 locations in Arizona after closing the five locations.
The chain had grown to 35 locations by 2022 but has since downsized.
The fast-food chain, which is owned by private equity firm 39 North Capital, is known for its Eegee frozen fruit drink, Eegee Fizz, and, Teagee tea drink; submarine sandwiches, chicken tenders, fries, and salads.
Eegee's ran into some customer angst in October 2022 when the chain switched bread vendors. The reaction was negative enough for the company in May 2024 to begin testing a new vendor, Capistrano's, which it officially switched to in August 2024, Tucson.com reported.
Kommentare