BurgerFi International filed for Chapter 11 bankruptcy protection on Wednesday following a brutal year in which the company struggled with deepening sales and earnings losses.
The Fort Lauderdale, Florida-based owner of its flagship fast-casual burger brand and the fast-casual Anthony’s Coal-Fired Pizza submitted its filing in a Delaware bankruptcy court. The filing lists between $50 million and $100 million in assets and from $100 million to $500 million in estimated liabilities.
The company has been hurtling toward this resolution for some time. Investors have acquired BurgerFi’s debt at discounts from the company’s lenders. BurgerFi has hired a chief restructuring officer amid a wave of resignations of company directors, and then last month said that a bankruptcy filing was a real possibility.
When it acknowledged the possibility of a bankruptcy, BurgerFi cited “significant adverse developments” that caused deepening financial losses. The company at the time said it had a net loss of $18.4 million in the quarter ended July 1, far worse than the $6 million loss of a year ago.
BurgerFi brought in new executives last year amid persistently weak sales, particularly at the burger chain. CEO Carl Bachmann promised a turnaround back in January, but those plans ran into deepening industry sales challenges. Same-store sales in the first quarter this year declined 13% at the burger chain.
The company will likely be sold. TREW Capital Management, which acquired Rubio’s out of bankruptcy, has bought the debt for BurgerFi and helped provide funding to carry the company in recent months.
Several restaurant chains have declared bankruptcy in recent months following a volatile period in which cost increases led to menu price hikes that led customers to cut back on dining out. But many companies also emerged from the pandemic in a weaker financial state, with heavy debt loads, leases or other issues.
Many other struggling chains, such as the fast-casual pizza chain MOD Pizza, avoided bankruptcy with out-of-court deals.
BurgerFi went public in 2020 in a reverse merger with the special purpose acquisition company Opes Acquisition. A year later it merged with Anthony's.
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