Platinum Corral, a Golden Corral franchisee operating in North Carolina and Virginia, has filed for Chapter 11 bankruptcy protection after closing more than half of its restaurants, management revealed Friday.
The company said it sought protection from creditors because of a drop in sales from the pandemic. The filing shows that Platinum has just under $49.4 million in liabilities. It is believed to be the second-largest franchisee within the Golden Corral system.
Sixteen of the buffet restaurants have been permanently shuttered, according to a statement from the company, while two that were temporarily closed are expected to be reopened. Platinum said it tried to operate a number of its restaurants as cafeterias, with limited indoor seating capacities, but the recasts “proved to be financially unsustainable.”
The company is the second big Golden Corral franchisee to file for bankruptcy protection since the pandemic began. The system’s largest franchise operator, 33-unit 1069 Restaurant Group, filed for Chapter 11 relief from creditors in October. It, too, cited a downturn from the pandemic as its reason.
The buffet market has been particularly hard hit by the pandemic because of its signature serving style. Early in the COVID crisis, many states suspended the operation of serve-yourself restaurants because of fears that model would foster the spread of coronavirus from one buffet user to the next.
Golden Corral initially closed all 35 company-operated restaurants in the 490-store chain. In an interview with Restaurant Business about two weeks ago, CEO Lance Trenary said that about 290 units were open, with 40 of those operating as cafeterias.
The chain has been experimenting with a number of alternative serving styles, including drive-thrus and takeout stations. It has also revealed plans to try a fast-casual-like service model where patrons give their orders at a counter and take a seat.
Platinum currently has six Golden Corrals open in North Carolina, its home state, and four in Virginia. It anticipates that two more—one in each state—will open later this year.
“We strongly believe the restructuring will afford us the opportunity to successfully operate 12 Golden Corral Buffet Restaurants in North Carolina and Virginia for the long term,” Bill Sewell, Platinum’s president and CEO, said in a statement.