Fast casual chain BurgerFi filed for Chapter 11 bankruptcy and announced it on Wednesday, September 11.
It is worth noting that the mentioned company has been signaling for months that it is facing significant financial problems.
In a sense, BurgerFi has become something of another victim of the increasingly difficult business conditions. The external environment has become less favorable for fast-casual chains operating in the United States. The circumstances of the current configuration of reality, where there is economic uncertainty and price pressure, are to some extent the reason that such players in the mentioned industry as Rubio’s, Buca di Beppo, and Red Lobster have also filed for bankruptcy this year.
Such giants of the food service area as McDonald’s, Starbucks, Burger King, and Wendy’s have not yet come close to the brink of bankruptcy. At the same time, this does not mean that the specified companies are not currently facing various difficulties. The mentioned players in the food service industry reported a decline in traffic and a deterioration in overall sales.
BurgerFi filed for bankruptcy protection in the US District Court for the District of Delaware. The company said that all of its corporate locations will operate as usual. Franchisee-owned locations are exempt from the bankruptcy filing process. The relevant information is contained in the company’s press release.
It is worth noting that in the United States, a kind of practice has recently emerged in which firms file for bankruptcy to wind down some operations, shed debt, and save on costs.
BurgerFi estimates it had between $100 million and $500 million in liabilities, but only $50 million to $100 million in assets. It is worth noting that the company warned of the risk of bankruptcy, which will become a reality if it does not receive enough cash from its senior lender, outside providers, or by selling off assets.
