Burgerim was once one of the hottest, fastest-growing restaurant chains in the country, attracting thousands of would-be operators hoping for a piece of the American Dream. And then the company's founder vanished. Its offices shut down. He left behind a crumbling wreckage of broken promises, closing restaurants and franchisees facing a financial nightmare. This is the story of one of the worst disasters in the history of franchising.
Photograph by Christina Gandolfo
Photograph by Christina Gandolfo
The Burgerim disaster
Burgerim was once one of the hottest, fastest-growing brands in the U.S. Then its founder left the country, leaving behind a wreckage of unpaid workers, bankrupt franchisees and others struggling to make it work.
Restaurant Business
Burgerim franchisees pick up the pieces
Hundreds of franchisees lost money betting on the Burgerim brand. Many ended up in bankruptcy. Some lost their homes. These are their stories.
“It feels like all they did was create a vehicle of revenue through the franchise fee because they knew they could sell it and to hell with the consequences.”
As Burgerim grew, protection for franchisees fell short
The fast-casual burger chain exploited a hole in franchise regulations, selling more than 1,200 licenses before problems became evident.
“Go f---ing sell them the dream. ... Sell them the American Dream.”
franchising
How franchisees can avoid a bad investment
Here are a few steps operators can take to keep from falling into a Burgerim-like trap.
1,550
Total number of franchises Burgerim sold between 2015 and 2019, according to the California Department of Financial Protection and Innovation.
Fast_Casual
Sen. Feinstein asks FTC to investigate Burgerim
The U.S. senator is asking for an inquiry in the aftermath of an RB report detailing serious problems at the franchise.
"I sold my house. I sold everything. I don't have an apartment. I'm staying on my sister's couch."
Fast_Casual
Burgerim loses franchise registration in more states
Washington has revoked the chain’s right to sell franchises, and Maryland issued a stop order, while Yelp issued a warning on its ratings.
franchising
Recent disputes highlight franchisors' use of vendor rebates
Most franchisors receive such funds to run their supply chains, but franchisees often push back as their prices increase.
franchising
Burgerim is sued over deceptive sales practices
A Florida operator sued the fast-casual franchise and its Florida developer, saying they routinely broke franchise rules in selling stores to franchisees.
franchising
Calls grow for tighter franchise regulations
As stories of problems at franchise brands mount, advocates and some regulators call for more enforcement at the federal level.
franchising
State of California orders Burgerim to refund franchise fees
The state accused the fast-casual burger franchise of taking $57 million in franchise fees from 1,500 investors. The problems were detailed in an RB investigation last year.
franchising
Burgerim franchisees find a second life with other concepts
Many develop independent concepts, while others go with franchises. Some continue to deal with challenges associated with the chain’s collapse.
franchising
Burgerim tells franchisees wanting refunds to expect ‘pennies on the dollar’
The franchise’s president told operators they would be allowed out of their franchise agreement but said there are no assets left to pay them.
franchising
U.S. Attorney General sues Burgerim over franchise violations
The federal government filed a civil lawsuit against the company and its founder, saying that it intentionally misrepresented the risks and didn’t provide promised refunds.