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Financing

Golden Corral's largest franchise operator files for Ch. 11 bankruptcy

Eric Holm's 1069 Restaurant Group has run up a debt of $49.7 million. Only six of its 33 units are open.
Golden Corral
Photograph: Shutterstock

The largest operator of franchised Golden Corral buffet restaurants, 33-unit 1069 Restaurant Group, has filed for Chapter 11 bankruptcy protection.

The company is wholly owned by Eric Holm and his wife, Diane. It operates Golden Corrals through several subsidiaries, most based in Florida. The best-known among them may be Metro Corral Partners. The restaurants operated by that and other subsidiaries  are located in Florida and Georgia.

Court documents show the company has amassed a debt of $49.7 million, which 1069 attributed to restaurant closures and depressed sales during the COVID-19 pandemic. All of the company’s restaurants were closed in March, when most states banned self-service formats like buffets to slow the spread of coronavirus.  Six have since reopened with modified service models, with plans already begun to resume operations in 18 more by the end of the year.

The company said it will use the breather afforded by bankruptcy to reconfigure its remaining restaurants to fit ongoing service restrictions and assess what branches may need to be permanently closed.

Metro Corral "notified us in advance of their intention to file voluntary Chapter 11 reorganization," Golden Corral Corp., the brand's franchisor, said in a statement issued to Restaurant Business.  "We are working with the Metro Corral leadership team and anticipate that they will continue to operate 24 of their 33 Golden Corral franchised locations in Georgia and Florida." 

Buffets have been particularly hard hit by the pandemic because of the ban on their underlying format. Golden Corral has experimented with several alternative service models, including what it calls a no-touch buffet, where customers wear gloves or use napkins to wield serving utensils without actually touching them. Some restaurants have also switched to cafeteria-style service where staff members dish out unlimited portions.

Golden Corral's buildings were not built to provide those alternative forms of service.

"The pandemic's business impact on our segment has been significant," said Golden Corral CEO Lance Trenary.  "Recovery has been steady, but slow, and some franchisees will not be able to continue to operate without additional financial relief."

Restaurant service restrictions of all sorts were recently lifted in Florida, 1069’s home and largest market. 

The request for protection from creditors was filed in the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division.

Update: Comments on the bankruptcy from franchisor Golden Corral Corp. have been added. The company also provided more details about its new service formats.

 

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