44-year-old burger chain’s franchisee files Chapter 11 bankruptcy

The "burger wars" of the 1980s, which featured fierce selling campaigns by McDonald's, Burger King, and Wendy's, person a caller quality contiguous with immoderate antithetic players.

Burger chains are battling economical challenges today, closing underperforming locations and, successful immoderate cases, filing for bankruptcy protection.

Wendy’s said it planned to adjacent 5%-6% of its 5,831 U.S. edifice locations listed connected its website, oregon astir 292 to 350 underperforming units, successful 2026, according to its Feb. 13 fourth-quarter net call.

“By closing consistently underperforming restaurants, we are enabling our franchisee partners to summation absorption connected locations with the top imaginable for profitable growth,” Wendy’s CEO Ken Cook said successful the net call.

Burger concatenation franchisees person besides filed for bankruptcy extortion arsenic they conflict fiscal distress.

Geddo Corp., relation of 12 Farmer Boys burger concatenation franchises successful California and Arizona, filed for Chapter 11 bankruptcy extortion aft merchant currency beforehand lender withdrawals from its accounts hindered its currency flow, preventing it from paying vendors, according to Restaurant Business.

The Riverside, Calif.-based fast-casual concatenation filed its petition successful the U.S. Bankruptcy Court for the Central District of California successful Santa Ana connected March 31, listing $1 cardinal to $10 cardinal successful assets and liabilities, according to Bankruptcy Observer.

Geddo's largest unsecured creditors see franchisor Farmer Boys Franchising Co., owed $500,000 connected a note, $300,000 successful backmost rent and royalties, and $250,000 from a loan, according to Bondoro.

Other apical unsecured creditors see Marlin Leasing, owed $139,000; Havadji Holdings, owed $39,000; and The Michaels Family Trust, owed $21,000.

Geddo's astir important liabilities that caused it fiscal distress dwell of 40 merchant currency beforehand loans, totaling $5.2 million, from which the lenders had begun collecting payments from its accounts, according to Restaurant Business.

Geddo Corp. planned to make 2 locations successful Goodyear and Phoenix, Ariz., and utilized the merchant currency beforehand loans arsenic portion of that effort. The lenders' postulation process for the short-term, high-interest loans, reportedly called for withdrawals straight from the franchisee's slope accounts, which caused superior shortfalls.

The shortage of superior successful its accounts led the franchisee to default connected payments to its Farmer Boys franchisor, vendors, and different clients. The debtor said astir of the merchant currency beforehand lenders refused to negociate manageable terms, and since it could not run with those indebtedness obligations successful place, it filed for bankruptcy, the institution reportedly said successful tribunal papers.