CN Holdings LLC, the operator of 11 Firehouse Sub units in Utah and Idaho, has filed for Chapter 11 bankruptcy.
The Subchapter V filing, which allows owners Chris Morris and Natalie Bosworth to retain control, indicates the restaurants will continue to operate, except for one Utah unit that has closed.
However, Morris and Bosworth, who were married but have divorced, intend to sell unprofitable locations and to reorganize around the core, profitable units, according to court documents.
The Firehouse units were previously operated under three entities: 4C&N LLC, Ignacious Endeavors LLC and 3C Inferno LLC. But the three were merged into CN Holdings LLC in January “for ease of administration and management,” the filing said.
Before the filing, the couple encountered “financial hardships” that included significant delays on construction of two new units. The company accrued about $2.3 million in debt.
And when the restaurants finally opened, sales were slower than projected. The losses from those units proved a distraction, destabilizing the entire operation.
Morris did not immediately respond to requests for more information.
Jacksonville, Florida-based Firehouse Subs is owned and franchised by Restaurant Brands International. CN Holdings is among a number of franchisee group bankruptcies in recent months, including a 43-unit Subway operator and a 130-unit Popeyes franchisee.
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