Financing

A large Wendy's franchisee declares bankruptcy

Florida-based Starboard Group sought debt protection for its Wendy’s restaurants. It is the latest in a series of restaurant companies to take that step.
Wendy's bankruptcy
A 73-unit Wendy's franchisee has filed for bankruptcy. | Photo: Shutterstock.

Starboard Group, a Coral Springs, Fla.-based restaurant operator, has placed its Wendy’s restaurants into bankruptcy protection, the company said on Tuesday.

SGB Burger Opco and several different entities filed for Chapter 11 on Tuesday, each declaring various levels of declared liabilities. Starboard operates about 61 Wendy’s throughout the Southeast, in Florida, Alabama and other states. 

SBG is a franchisee of several other restaurant brands, including Fuzzy’s Taco Shop, McAlister’s Deli and Subway. The company said that the bankruptcy filing has not affected those restaurants.

“Placing the Wendy’s division in a Chapter 11 reorganization is the wisest decision we could have made in order to save jobs, strengthen the company and our partners for the future,” SBG CEO Andrew Levy said in a statement.

He blamed the filing on a “combination of post-COVID consumer habits, ever-increasing costs to do business, and significantly higher interest rates.” And he said they have “placed many QSR franchisees in similar situations nationwide.”

Several different franchisees have filed for federal debt protection this year, including a trio of Burger King franchisees, a large Hardee’s operator, a Popeyes franchisee and a McDonald’s franchisee.

Numerous mostly small restaurant chains have also filed for bankruptcy this year, including Clover Food Lab, Icebox Café, Back Yard Burgers, Wild Wing Café and Green District.

(The pandemic is not yet done with restaurants.)

Costs have soared for many restaurant companies in recent years and companies with heavy debt levels or challenged operations in one form or another have struggled and sought federal help to reorganize debts.

SBG had operated nearly 100 Wendy’s restaurants in 2020, at least according to reports. It was sued that year over allegations that its CEO had spent $1 million to remodel a home in Montana. The company's website this week said it operated 73 units. Court documents indicate it has closed 11 unprofitable restaurants leading up to the bankruptcy filing.

UPDATE: This story has been changed to update the number of restaurants SBG operated. 

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