Superior Star acquired a group of about 93 Hardee’s restaurants in 2023 for $15 million and spent another $4 million to improve operations. But those restaurants proved to be in worse condition than it expected, draining cash flow and suppressing sales and ultimately leading to its bankruptcy filing last week.
That, at least, is according to new filings in the company’s Chapter 11 declaration. In the filing, the franchisee, which now has 59 locations in nine states, painted a picture of an acquisition gone wrong, leading to a bankruptcy just three years after the purchase.
“Due to various omissions and/or misrepresentations by the seller, almost immediately after the acquisition of the restaurants, the debtor was forced to absorb extensive and unforeseen deferred maintenance and repair expenses, unpaid taxes, and other latent liabilities,” Brian Bonfiglio, CEO of Superior Star, said in a court filing this week.
According to the court filing, the 59 restaurants generated about $80 million in gross revenue. But the operator’s principles also spent $2 million over the past 2.5 years to fund the franchisee, including $300,000 recently to cover payroll.
The operator has also closed several underperforming stores and terminated leases. As part of those closures, Superior Star reached agreements with the landlords and the franchisor to continue paying rent on the locations, creating substantial “dark site” expenses.
The franchisee intends to reject those expenses in bankruptcy court. The company’s bankruptcy filing lists more than $900,000 worth of such agreements.
Superior Star said that it fell behind some state sales taxes in some locations, triggering levies on the company’s bank accounts and reducing cashflow. The levies appeared to have triggered the bankruptcy filing to help the company “preserve its business.”
The operator also believes that a bankruptcy reorganization can result in “an operationally and financially durable enterprise, with the ability to employ people, pay taxes, and otherwise be a productive corporate citizen for years to come.”
Not mentioned in this week’s filing, but listed among bankruptcy liabilities, is a $7 million seller note with Starcorp, stemming from the 2023 acquisition. Superior Star listed that debt as “in dispute.”
Superior Star’s bankruptcy is the latest in a string of Chapter 11 filings among restaurant chain franchisees since the start of 2025, including one earlier this week of a two-unit Checkers franchisee. Hardee’s franchisees have filed two of those, including the Chapter 7 filing earlier this year of Arc Burger.
Both Arc and Superior Star acquired their restaurants in 2023. In Arc’s case, the company acquired restaurants out of bankruptcy from Summit Restaurant Holdings.
Restaurant chains have struggled with weak sales and traffic in recent years, which has hurt profits among franchisees as costs for food, labor, rent, and other expenses have increased.
That has exposed weak financials at many large-scale franchisees, leading to their bankruptcy filings and closed locations.
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