The atmosphere for restaurant chains across the country has been tough with the twin pressures of Bidenomics and COVID serving as a one-two punch to destroy so many companies. And this week, yet another chain is considering a filing for Chapter 11 bankruptcy.
BurgerFi International has announced that it will likely file for bankruptcy protection.
The company operates Anthony's Coal Fired Pizza & Wings, which operates across eight states in the northeast, and the burger chain, BurgerFi, also across the Eastern Seaboard.
Anthony's Coal Fired Pizza & Wings has 59 locations, and BurgerFi has 122 locations.
The company's two chains are called "fast-casual" establishments, meaning that they are a bit fancier than your typical Burger King, McDonald's or Taco Bells. Less than a decade ago, it was thought that these restaurant chains were the future of fast-food. But since COVID shut down so many restaurants -- many never to return -- and the economy has taken such a downward spiral in this era of Bidenomics, the upscale trend seems to be under threat of bottoming out.
The company made its announcement on Monday, saying in a news release, "BurgerFi International, Inc. owner of the high-quality, casual dining pizza brand under the name Anthony’s Coal Fired Pizza & Wings ('Anthony’s') and one of the nation’s leading fast-casual 'better burger' dining concepts through the BurgerFi brand, announced today several key initiatives with the goal of enhancing the company’s prospects and ensuring stable management as the company goes through the process of reviewing strategic alternatives," according to The Street.
The company had already been delisted from the Nasdaq in January after its stock prices collapsed. Stock was only 32 cents per share on Monday, the U.K.'s Daily Mail added.
BurgerFi also noted that filing for Chapter 11 protection will not necessarily fix its issues, adding in its statement, "There can be no assurance, however, that the strategic review process will result in an outcome favorable to the company or its stakeholders."
This is not a sudden move, of course. BurgerFi defaulted on its credit obligations in April and had been allowed a forbearance until July 31. The company has also secured a $2 million loan while it considers this reorganization process.
But the company warned that it still might not make it through the process intact.
BurgerFi also noted that situations could render them unable to remain in business, saying, "Our ability to continue to access liquidity, to pursue and enter into a strategic transaction or seek a strategic transaction while in bankruptcy protections, to maintain our listing on the Nasdaq Stock Exchange, and to continue as a going concern."
BurgerFi is hardly alone. Indeed, it is just one of many national chains of one sort or another in deep financial problems.
In May, for instance, national seafood restaurant Red Lobster announced it was filling for bankruptcy.
Another once big name chain, TGI Friday's also filed for bankruptcy in Florida.
Rival chain Applebees is also having major issues, closing 35 restaurants in May.
Restaurants are not the only major American businesses collapsing. National fabric and sewing supply company Joann and filed for bankruptcy this year.
Bed Bath & Beyond also told its investors that it filed reorganization under Chapter 11 in April. The company said that it had $4.4 billion in assets and $5.2 billion in debt, CNN reported.
