A FAST food chain has revealed it is exploring bankruptcy options, raising fears of mass closure.
Rival In-N-Out BurgerFi is the latest food chain to consider mass closures and bankruptcy after poor post-Covid performance.
Like Red Lobster, the burger chain created in 2011 is consulting experts on how to save the business which is bleeding millions every month.
O News It comes after the chain closed 14 locations in 2023, followed by eight more earlier this year.
There are now 102 locations left, mostly in Maryland, Florida, North Carolina, New York and Indiana.
The last time the chain’s operational footprint fell below 100 points of sale was in 2018.
“We are committed to considering all potential strategic alternatives,” David Heidecorn, president of BurgerFi, said in a statement Thursday.
“While we are confident in the company’s current operating strategy, we are aware of the company’s current liquidity challenges and are committed to exploring strategic alternatives that we believe would be in the company’s best interest best interests of the company and its stakeholders.”
Heidecorn replaced the chain’s former executive chairman, Ophir Sternberg, who resigned prior to the evaluation process by Kroll Securities, BurgerFi’s financial advisors.
However, CEO Carl Bachmann and CFO Chris Jones will remain in their positions to provide stability during this challenging period.
Bachmann, who joined in July 2023, remains optimistic about the network’s future.
He is “more confident than ever that joining the company was the right decision,” Bachmann previously told investors, per QSR.
However, the network has suffered a series of financial problems this year, putting its future at risk.
In January, BurgerFi’s share prices plummeted so much that they fell below the $1 minimum on the stock exchange.
This caused the network to be delisted from the Nasdaq and on Monday the share price was 32 cents.
BurgerFi has not surpassed the $1 per share minimum requirement since early December.
Three months after being removed from the list, the chain was unable to repay the loan.
It defaulted on a credit agreement that still has $51.3 million outstanding, according to QSR Magazine.
Last month, its financial problems were truly revealed in an earnings update that revealed huge losses.
Between January and March 2024, sales were 13% lower than in the same period last year.
In the first quarter, BurgerFi suffered losses of more than $6 million.
These dismal numbers follow a double-digit drop in sales in the last quarter of 2023.
Despite its struggles, BurgerFi has continued to introduce changes to some of its locations, including an exclusive deal with Heinz.
It’s not just the casual chain that’s struggling, as other food chains have also announced mass closures.
Rubio’s Coastal Grill closed nearly 50 locations as a CEO said restaurants are at “breaking point.”
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