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Bankruptcy Filings Spark Questions About Restaurant Franchisee Outlook | Franchise Insights







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Emilee Wentland




Filing for bankruptcy is a last resort for franchisees. There are often a variety of remedies franchisees can try before taking that step, Lathrop GPM attorney Robert Haupt said. “You can be a bankruptcy-eligible client, who has no intention of filing for bankruptcy, or you could walk into my office and say, ‘Hey, I need a bankruptcy.’ And I’ll say, well, not so fast,” Haupt said.

At any given time, Haupt could be dealing with hundreds of bankruptcy cases at varying stages in the process. In 2023, attorneys noticed more franchisees filing for bankruptcy compared to recent years. Three major Burger King franchisees, among others, filed for Chapter 11 bankruptcy protection.

An 8.7 percent increase in systemwide sales at Burger King in 2022 shows macro sales growth for the brand with nearly 20,000 stores across the globe. But the three franchisees that filed last year cited slower foot traffic, higher costs and low sales.

Franchisees TOMS King, Meridian Restaurants Unlimited and Premier Kings filed for bankruptcy in 2023, for a total of 278 Burger King restaurants impacted. Premier’s sibling company, Premier Cajun Kings, owned 30 Popeyes, 11 of which closed before it filed March

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