CHILI’s revealed that the restaurant is still operating despite the viral allegations, but experts warned that the company still has financial hurdles to clear before everything is resolved.
On Friday, a social media rumor went viral claiming that Chili’s was closing its stores, causing the restaurant to go into damage control.
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Chili’s released a statement revealing that allegations of its restaurant closures “include misinformation and mischaracterizations about the state of our business,” while speaking to Forbes.
The company added that despite their viral momentum, their popularity is actually “growing across the country.”
Ragini Bhalla, head of brand and spokesperson at Creditsafe, said the company’s revenue increased in the first three quarters of 2024.
Chili’s had revenue of $1.12 billion, compared to $1.07 billion the year before.
The viral rumor originated from a blog called Taste of the Countrywhich boasted the headline “Chili’s is closing doors across America in 2024,” with the story announcing only that some locations had closed.
The restaurant spent the weekend calming loyal customers on X, formerly known as Twitter, telling them, “We’re not going anywhere” and “Goodbye, we’d never leave you.”
However, despite the company’s need to allay concerns, Chili’s situation may not yet be clear.
Brinker International is at high risk of failure, according to Bhalla.
The company currently has more than $2 billion in debt, but only has a cash balance of $15.5 million, according to the company’s third-quarter earnings report.
Bhalla believes that if the debt matures in 2024, it will be difficult for the company to meet its financial obligations as it will not have enough cash to do so.
“Although the company is seeing sales and revenue growth, this is not necessarily enough to pay off all of its debt on time.
deadlines for them to mature”, revealed the spokesperson.
“In this case, the company may have to consider other options, including bankruptcy, to overcome these obstacles.”
If the company declares bankruptcy, the spokesperson believes this could be a big problem for shareholders.
“The company is overleveraged, meaning it relies heavily on
debt to finance its operations compared to the value of the equity it has,” Bhala said.
“If the company decides to file for bankruptcy, shareholders run the risk of not recovering their investments.”
‘I’M CRYING’
Despite the increase in revenue, Chili’s still closed some of its stores this year.
The manager of his South Portland, Maine, facility said May 7 was his last day.
No other details, such as the reason for the closure, were provided.
This shutdown affected 35 employees and it is unclear if they were given the opportunity to transfer to another Chili’s restaurant, according to the Bangor Daily News.
Employees were given less than two weeks’ notice before the closure, ABC affiliate WMTW-TV reported.
Loyal customers were also left heartbroken after finding out that one of the New Hampshire locations in Dover and Seabrook also closed.
Fans took to Facebook to share their shock at the store’s demise.
“We have always had a pleasant experience here,” one person wrote. “I’m sad to see him go.”
“Nooooo,” wrote another person.
“I’m crying!” wrote a third person.
This story originally appeared on The-sun.com read the full story
