BurgerFi International Inc. (BFI) is seeking another $5 million in financing to keep operations going as it prepares for a sale and looks to exit leases on 19 units closed in August and September, along with its corporate headquarters.
Chief Restructuring Officer Jeremy Rosenthal in court filings on Thursday outlined the reasons for the Chapter 11 bankruptcy earlier this week filed by the parent of the BurgerFi and Anthony’s Coal Fired Pizza brands, blaming macroeconomic headwinds, and rising labor and food costs.
He also indicated there are stalking horse bidders—one for BurgerFi and one for Anthony’s—which could take the brands separate ways, though the bidders were not yet identified.
Before the bankruptcy filing, BFI had hired Kroll Securities Inc. to help sell the brands. But Rosenthal wrote that an out-of-court sale wasn’t feasible, given the company’s liquidity constraints, liabilities, leases and vendor obligations, as well as the company’s status as a public company.
“As the debtors’ liquidity continued to deteriorate, commencing these Chapter 11 cases was necessary to preserve the value of the debtors’ assets and maximize its going concern value by preventing landlords from seeking to terminate leases,” the filing said.
It has been a rocky road from the beginning for BurgerFi and Anthony’s.
The fast-casual burger brand went public when it was acquired in 2020 by a special purpose acquisition company, or SPAC. The next year, BurgerFi International acquired the Anthony’s chain, taking on about $50 million in debt.
And the company’s debt load continued to grow, as sales declined.
BFI reported a net loss of $103.4 million in 2022 and a net loss of $30.7 million in 2023. And despite the attempted turnaround by CEO Carl Bachmann, who was hired last year, the sales decline continued into 2024. The company expected to report a net loss of $18.4 million for the quarter ended in July, which was triple the net loss of $6 million a year earlier.
When it filed for bankruptcy earlier this week, the company had about $1.6 million cash on hand, down from $7.6 million at the start of the year, court filings said.
BurgerFi International’s debt now totals about $60.3 million, and that debt is now owned by senior lender TREW Capital Management.
Now BFI is seeking an additional $5 million in funding from TREW to keep operations going while it prepares for a sale.
BFI in August and September shuttered 19 units across both brands in an ongoing effort to prune “suboptimal performers.” That followed the closure of 14 underperforming restaurants last year, and another eight in the first quarter this year.
BurgerFi now has 93 locations (76 franchised and 17 company-owned). Anthony’s now has 51 units, which are all company-owned except one dual-branded franchised location.
Rosenthal in court documents said the improved profitability of remaining restaurants will help the company negotiate concessions from landlords on existing leases, and BFI has hired Hilco Real Estate LLC to help with that, according to the filing.
BFI has asked the court to reject 20 unexpired leases, including that of the corporate headquarters in Fort Lauderdale, Florida.
Here are the restaurant locations, which have already been shuttered. The company is also abandoning the equipment and property within these restaurants:
ANTHONY’S:
219 N. Main St., Natick, Massachusetts
960 Dekalb Pike, Blue Bell, Pennsylvania
852 NJ-3, Clifton, New Jersey
420 E. Altamonte Dr., Altamonte Springs, Florida
7776 Norfolk Ave., Bethesda, Maryland
50 E. Wynnewood Rd., Wynnewood, Pennsylvania
220 Hillside Rd., Cranston, Rhode Island
2045 Mackenzie Way, Cranberry Twp, Pennsylvania
1900 Okeechobee Blvd., West Palm Beach, Florida
BURGERFI:
7959 W. Atlantic Ave., Delray Beach, Florida
271 Indian Lake Blvd., Hendersonville, Tennessee
6230 W. Indiantown Rd., Jupiter, Florida
1514 Immokalee Rd., Naples, Florida
12712 Tamiami Trail East, Naples, Florida
16120 Preserve Marketplace Blvd., Odessa, Florida
1955 E. Hallandale Beach Blvd., Hallandale Beach, Florida
628-3 Atlantic Blvd., Neptune Beach, Florida
10590 Pines Blvd, Pembroke Pines, Florida
10647 Sheldon Rd., Tampa, Florida
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