Financing

Struggling Back Yard Burgers declares bankruptcy

The fast-casual better-burger chain that once had nearly 200 restaurants filed for Chapter 11, its second such filing in just over a decade, after closing several restaurants.
Back Yard Burgers bankruptcy
Back Yard Burgers opened a new prototype just last year, but has now filed for Chapter 11 bankruptcy. | Photo courtesy of Back Yard Burgers.

Make that Chapter 22 for Back Yard Burgers.

The fast-casual chain declared bankruptcy late last month, citing bills that accumulated during the pandemic, after closing several additional restaurants.

It’s the second bankruptcy filing in a decade for a concept that at one point was considered a pioneer in the growing trend of “better burger” concepts, only to watch several other brands pass it by.

The company is based in Nashville but is owned by Axum Capital Partners, the Charlotte-based private equity firm that also owns Wild Wing Café, which itself filed for bankruptcy protection this month. Back Yard Burgers’ filing was quietly filed last month under the name Tantum Companies.

Both Back Yard Burgers and Wild Wing Café are overseen by the same CEO, Mark Cote.

Back Yard Burgers, or BYB, operates 20 locations, six of which are corporate restaurants. But the company has been closing restaurants in various communities this year, according to local reports. The chain operated 35 restaurants at the end of 2022, according to data from Restaurant Business sister company Technomic, suggesting it closed 15 locations.

But the brand has been on a long-time, downward trajectory for years. The chain 15 years ago was publicly traded and considered on the cusp of what was a growing trend for fast-casual, higher-end burger concepts, and operated 180 restaurants around the country.

Fast-growing newcomers like Five Guys, Shake Shack and Habit Burger passed it by, however. The brand also struggled during the Great Recession and by 2012 had sought Chapter 11.

The brand emerged from bankruptcy and in 2017 was sold to Axum.

The chain last year appeared to be on the verge of some growth again. It opened a new prototype and its CEO at the time discussed a potential development deal in Detroit.

Instead, system sales declined 8.3%, according to Technomic, and the chain closed five restaurants.

According to court documents, Back Yard Burgers has $10.9 million in secured debt. But the company also has $185,378.47 in credit card debt to “fund many expenses of Tantum, specifically necessary expenses leading up to the filing of these bankruptcy cases.”

Back Yard also has more than $2 million in equipment loans.

Cote and industry advisor Craig Miller were brought in last year. The company closed underperforming locations and shifted talented management to more profitable locations, according to a filing. It also cut corporate overhead and negotiated deals with vendors.

Yet the company has been “unable to address significant accounts payable debt that built up during the pandemic,” leading to the bankruptcy filing.

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