The owner of 57 Burger King restaurants filed for bankruptcy, blaming high labor costs and inflation for forcing his company to go under, according to court documents.
Consolidated Burger Holdings – one of Burger King’s largest franchisees – – owes nearly $37 million to creditors and filed for Chapter 11 bankruptcy protection on Monday.
It is seeking to sell its assets through a court-supervised process.
“Recent increases in costs of shipping and food, decreased availability of labor and inflation” worsened issues for the franchisee, said Joseph Luzinski, the company’s chief restructuring officer.
The company’s restaurants are located in the Florida Panhandle, including nine locations in Tallahassee, and southern Georgia.
Several large Burger King franchisees have filed for bankruptcy over the past few years, still reeling from the COVID-19 pandemic and sticky inflation, which decimated foot traffic and sales at fast-food chains.
Consolidated Burger Holdings’ bankruptcy is the result of “significant foot traffic and revenue declines without a corresponding drop in rent costs, debt or other liabilities,” Luzinski said in court documents.
The firm owes $36.64 million to less than 1,000 creditors after operating some stores at a loss, the bankruptcy documents said.
In its most recent fiscal year, the franchisee reported sales of $67 million and a net operating loss of $12.5 million.
It suffered a $6.3 million loss in fiscal year 2023, as well.
Burger King sued Consolidated Burger Holdings in January 2024, alleging the franchisee broke agreements to substantially remodel and improve locations.
The two companies reached a settlement in September.
“The Burger King system is far stronger today because of our focus on great Franchisees who are committed to investing in their restaurants and teams for the long-term,” a Burger King spokesperson told The Post in a statement.
“This means a small number of franchisees who are no longer investing in their restaurants will be exiting the system. We are working quickly to get these restaurants transferred to high-performing operators.”
In court documents, the franchisee claimed it spent millions on upgrades and remodels across its Burger King stores.
The company has seen several other major Burger King franchisees file for bankruptcy in the aftermath of the pandemic.
Meridian Restaurants Unlimited, Toms Kings and Premier Kings all filed for bankruptcy in 2023. The three franchisees operated a combined 378 Burger King locations.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
