The Burger Restaurant Chain That Just Declared Bankruptcy

Due to rising prices and economic problems, many well-known major restaurants will struggle to stay open in 2024. The fast-food burger chain BurgerFi is the most recent business to file for Chapter 11 bankruptcy.

Food prices are going up, costs are going up, and sales are going down because shops are closing. That’s why it decided to reorganize its debt. CNN wrote that the company was having money problems and that the filing was made to keep the chain going while it fixed its finances.

Anthony’s Coal-Fired Pizza Was Bought, And Sales Dropped

When BurgerFi bought Anthony’s Coal-Fired Pizza & Wings in 2021, its money problems worsened. It was thought that adding Anthony’s would help the business get more people and make more money, but sales of both names have decreased.

A report with the U.S. Securities and Exchange Commission says sales at BurgerFi and Anthony’s dropped 4% from the same time last year to the end of the fiscal quarter in July 2024. The company was already having a hard time, and this drop in pay made things even worse.

More Money Is Owed Than Is Owned

One of the most worrying aspects of BurgerFi’s financial health is the amount of debt it has compared to its assets. The bankruptcy document states that the business has assets worth $50 million to $100 million.

It owes a lot more money, though between $100 million and $500 million, to be exact. Because BurgerFi owes more money than it has, it’s been tough for the business to meet its financial obligations and pay its bills.

The bankruptcy filing mostly affects company-owned sites. These places will stay open while the business changes its structure. On the other hand, franchised sites are not affected by bankruptcy and will not be hurt.

This move will give BurgerFi partners some peace of mind while the main company deals with its money issues.

What Inflation Means For The Restaurant Business

We’re not the only ones having trouble at BurgerFi. Prices have gone up significantly, which has hurt restaurants. Many businesses are about to shut down because of rising costs like food.

As prices rise, it becomes more expensive for many people to eat out. Restaurants have been hit harder than grocery stores. Since restaurant food costs have gone up, more people are making food at home, making people even less likely to go to places.

The U.S. Department of Agriculture (USDA) says that restaurant food prices increased 4.1% in July 2024 compared to July 2023. As prices rise, it becomes harder for places to make money. People aren’t going to BurgerFi and many other chains as much because they had to raise prices.

Because of inflation and other economic troubles, the food business is having a hard time. Not all chains have been able to change with the times. Some have gone bankrupt or had to close all of their shops.

In August 2024, Things Were Not Going Well For Burgerfi

Some people may be shocked that BurgerFi filed for bankruptcy, but the company’s leaders have known this was going to happen for a while. In August 2024, the company said it would need money to stay open. Costs were already going up, which was bad for business. The future didn’t look good without help from outside sources.

Because of these issues, BurgerFi began to look for ways to raise more money and change its structure. The company is going bankrupt under Chapter 11 to deal with its debt and keep its businesses open. BurgerFi’s new accounts aim to bring in more money and keep the business going.

There Is Still Hope For Burgerfi’s Chief Restructuring Officer

The people in charge at BurgerFi are still positive about the future despite tight money. Michael Rosenthal, who was in charge of rebuilding the company, was sure that bankruptcy would protect BurgerFi’s name and finish the business turnaround that began less than a year ago.

Rosenthal said, “We are confident that this process will allow us to protect and grow our brands, forge new capital, and continue the operational turnaround that began less than a year ago.”

Rosenthal’s hope shows that the business believes it can get back on its feet financially after bankruptcy. BurgerFi wants to fix its current issues and build its brand by reorganizing its debt and looking for new ways to get cash.

Where Does BurgerFi Go From Here?

The people who run BurgerFi are still positive, but they don’t know what the future holds for the business. As the chain works to fix its finances, it has to deal with many problems.

To stay in business, BurgerFi needs to raise more money and pay off its debts. There is more competition in the fast food market, and prices aren’t going down any time soon. To stay in business, BurgerFi will have to make smart business moves.

If it can’t fix things, the company might have to close, like many 2024 food groups have already. But BurgerFi is ready to fight for its life, and the next few months will be very important in figuring out if it can emerge from bankruptcy as a better, healthier business.

BurgerFi is focusing on its plan to make things better right now. It hopes that with the right help, it can get through the rough patch and offer great service to its regulars. The company still wants to move forward, even if it means going through some tough times.

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