Popular restaurant chain files for Chapter 11 | Global Market News
Iconic informal restaurant chains have battled for survival over the past 12 months with a number of submitting for chapter searching for to reorganize their companies to proceed working as going considerations.All of these distressed eating places first confronted setbacks 5 years in the past during the Covid-19 pandemic and by no means totally recovered. After the pandemic subsided, different financial issues added to their misery with rising prices of labor, food, and provides from inflation, elevated rates of interest on debt, and altering attitudes of shoppers on eating out. 💵💰Don’t miss the transfer: Subscribe to TheAvenue’s free day by day publication 💰💵Several eating places that had been common for over 50 years, akin to Red Lobster and TGI Friday’s, needed to file for chapter to reorganize their companies and keep in business. Red Lobster filed for Chapter 11 on May 19, 2024, closed 120 eating places and nonetheless operates about 545 places.Related: Formerly bankrupt and closed retail chain relaunches businessTGI Friday’s filed for Chapter 11 chapter safety on Nov. 2, 2024, to promote company belongings, scale back its restaurant footprint, and reject unfavorable leases and contracts. The company had about 600 franchises worldwide, together with 213 U.S. places, earlier than it filed for chapter.One of the newest eating chain bankruptcies was Addison, Texas-based Bar Louie’s submitting on March 26. The “gastrobar” chain’s guardian BLH TopCo LLC filed its petition to reorganize and close places. Bar Louie, which had as many as 130 places in 2020, at the moment has 48 places, in accordance with its web site.
Hooters of America filed for chapter safety. Photographer: David Paul Morris/Bloomberg through Getty ImagesBloomberg/Getty Images
Hooters of America files chapter And now, common informal eating chain Hooters of America, which has struggled financially over the past 12 months, filed for Chapter 11 chapter safety on March 31 to reorganize its business, together with a plan to promote over 100 of its places to a franchisee-led purchaser group.Related: Huge mall retailer considers chapter and shutting all shopsThe Atlanta-based franchisor and operator of more than 420 Hooters eating places in 42 states and 29 nations filed its petition together with 29 associates within the U.S. (*11*) Court for the Northern District of Texas, itemizing $50 million to $100 million in belongings and liabilities.More bankruptcies:
Hooters of America, on the identical day, reached an settlement to promote over 100 of its corporate-owned places to franchisees Hooters Inc. and Hoot Owl Restaurants LLC and negotiated a management settlement below which Hooters Brand Management, an entity led by the client group, will present the bulk of franchise assist features, in accordance with a assertion.The purchaser group consists of present Hooters franchisees, together with the chain’s unique founders, who own and operate over 30% of the company’s U.S. places and 14 of the 30 highest-volume Hooters eating places.All present Hooters franchise places, together with these exterior the U.S., might be operated by the company’s franchise and license companions. When all of the transactions are accomplished, the client group will own and operate about 70% of Hooters’ home places, the assertion mentioned.”For many years now, the Hooters brand has been owned by private equity firms and other groups with no history or experience with the Hooters brand,” Neil Kiefer, CEO of Hooters Inc., mentioned in a assertion “As a result of these transactions, the Hooters brand will once again be in the hands of highly experienced Hooters franchisees and we will be well-positioned to return this iconic brand to its historic success. On behalf of all Hooters employees, customers and franchisees, the buyer group is excited and optimistic about our future plans for the Hooters brand,” Kiefer mentioned.Related: After closing 700 shops, enormous auto elements chain opens places
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