National burger chain files for bankruptcy - sparking fears of mass closures
An upmarket US burger chain is the latest restaurant business to file for bankruptcy - as casualties in the industry mount up.
BurgerFi - which also owns Anthony's Coal Fired Pizza - sought Chapter 11 protection at a Delaware court on Wednesday. It has as much as $500 million of debts.
Across the two brands, the company has 162 locations - including a flagship BurgerFi in New York that only opened a few months ago. All are under threat.
It is the latest restaurant chain to file for bankruptcy in 2024, and follows Red Lobster, Rubio's, Buca di Beppo, World of Beer, Roti, plus Melt Bar & Grill.
As Red Lobster did this summer, BurgerFi is hoping it can get out of leases for its worst performing restaurants in a bid to cut costs and clear debts.
BurgerFi, which touts itself as a rival to Shake Shack and Five Guys, sells its cheeseburger for about $11 at its 102 restaurants.
Florida-basedBurgerFi warned bankruptcy was a possibility last month. Bosses said they had just $4.4 million in the bank as of August 14.
Losses for the second quarter were expected to be a staggering $18.4 million.
Today's grim news for BurgerFi's staff and fans comes after the chain closed eight restaurants in the first three months of the year.
This was on top of a further 14 closures last year, which means there are just 102 locations remaining in the US. There are 60 Anthony's pizza restaurants.
The majority of restaurants are in Florida,Maryland,North Carolina, New York andIndiana.
BurgerFi has yet to explain to the bankruptcy court in Delaware how it will sort out its finances, Sarah Foss, global head of legal at Debtwire, said.
'BurgerFi's Chapter 11 case comes on the heels of a busy year for restaurant bankruptcies, with chains like Rubio's, Red Lobster and Buca di Beppo commencing bankruptcy cases this year,' she added.
On its website, BurgerFi says: 'We don't just serve great burgers. Since 2011, we've been serving next-level burgers made with fresh ingredients from the top suppliers across the country with an uncompromising standard for flavor and quality in everything we do.'
The company said that closures were the main cause of its decline in sales, alongside the rising cost of food and labor.
The company first rang the alarm in May, when it first announced it wasconsidering 'strategic alternatives' due to its lack of cash.
Since it went public in 2020, BurgerFi's stock has dropped almost 60 percent. It was trading for just 14 cents on Wednesday.
It comes amid a slew of restaurant closures across the US, as companies struggle with increased costs for food and labor.
Popular Italian restaurant Buca di Beppo filed for bankruptcy in August - just days after it abruptly shut 13 underperforming locations.
World of Beer Bar & Kitchen was named among the fastest growing restaurant chains in the US in 2013.
It also filed for Chapter 11 bankruptcy in August, saying it owed suppliers as much as $50 million.
National coffee and upmarket grocery chain Foxtrot said at the start of April it will shut all its stores with immediate effect - leaving staff and customers stunned.
Companies are battling falling sales as Americans increasingly eat out less after two years of punishing price rises.
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