Bankrupt Burger King franchisee Meridian closes 27 restaurants

The company is shuttering locations in Minnesota, Utah, Montana, Kansas, Nebraska and North Dakota and may close more restaurants.
Burger King closures
Burger King franchisee Meridian Restaurants Unlimited is closing about one out of five of its 116 locations. / Photograph: Shutterstock.

Meridian Restaurants Unlimited, the 116-unit Burger King franchisee that filed for bankruptcy in March, is closing 27 restaurants, according to court filings.

The locations are in Minnesota, Utah, Montana, Kansas, Nebraska and North Dakota. Many of them are in small towns, such as Lewiston, Montana, a town of about 6,000 people 126 miles north of Billings.

The franchisee is also leaving open the possibility of more closures ahead, saying “it is possible, if not likely,” that further analysis suggests more closures are “appropriate.” But the company in a filing said that it doesn’t anticipate closing “all or even a substantial portion of their restaurants.”

Meridian and its advisers are negotiating rent concessions and operational improvements with landlords. “It will be in the debtors’ best interest not to conduct store closings at most of its locations,” the company said in a filing.

The company initially sought court approval to close 23 restaurants on March 29 but last week added four more to the list. The closures represent one out of five of Meridian's locations.

(Click here for a list of the closed restaurants.)

Meridian is one of two large-scale Burger King operators to file for bankruptcy while a third closed 26 restaurants  in Michigan. The company has struggled with weak sales and weak profitability at a time when costs have soared. While Burger King has been investing behind marketing and remodels, many of its locations operate with lower unit volumes.

The 90-unit operator Toms King was sold out of bankruptcy court last week, with four buyers acquiring 82 of its 90 restaurants for $33 million.

Meridian operated 120 restaurants, most of which it acquired when they were struggling, believing they could be turned around. The company has had unit volumes lower than Burger King’s $1.45 million average and struggled with high labor and food costs, which prompted its filing in March. The operator closed four units before declaring Chapter 11 bankruptcy protection.

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