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.
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.
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.
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.
How franchisees can avoid a bad investment
Here are a few steps operators can take to keep from falling into a Burgerim-like trap.
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.
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.
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.
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.
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.
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.
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.
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.
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.