Major Burger King Franchisee Files for Bankruptcy, Leading to 57 Closures & Hundreds of Lost Jobs

A major Burger King franchisee has filed for bankruptcy, resulting in hundreds of jobs being lost and concerns about the future of the fast-food giant.

On April 14, Consolidated Burger Holdings, one of Burger King’s major franchisees with 57 restaurants, filed for Chapter 11 bankruptcy. The company, based in Destin, Florida, owes creditors roughly $37 million, according to Parade.

“Over the past several years, and particularly as a result of the COVID-19 pandemic, the Debtors’ business suffered significantly from loss of foot traffic, resulting in declining revenue without proportionate decreases in rental obligations, debt service, and other liabilities,” the franchisee wrote in the bankruptcy filing, per USA Today.

The filing continued: “The Debtors have faced significant hurdles resulting from industry headwinds which, combined with the Debtors’ highly leveraged balance sheet, have significantly challenged the Debtors’ business and depleted their liquidity.”

The Burger King franchisee had been seeking a buyer for seven months before filing for Chapter 11 bankruptcy protection. The owner claimed that rising rents, increased costs of shipping, food, and labor, and decreased availability of labor all contributed to the filing.

Consolidated Burger Holdings is the latest franchisee to file for bankruptcy. TOMS King Holdings LLC — which owned 90 Burger King locations in Illinois, Ohio, Pennsylvania, Virginia, and North Carolina — filed for bankruptcy in January 2023 due to significant debt and poor performance. Since then, many of the locations previously owned by TOMS King Holdings have been sold or shuttered.

Meridian Restaurants Unlimited, which operated 100 Burger King locations in Minnesota, Kansas, and Nebraska, also declared bankruptcy in March 2023.

Burger King & the Antitrust Lawsuit

This is also just the latest legal hurdle facing the fast-food giant.

Jarvis Arrington et al v. Burger King Worldwide et al, filed in the Southern District of Florida in 2018, contends that Burger King and affiliated corporate organizations violated U.S. antitrust law by implementing “no-hire” or “no-poach” agreements at hundreds of franchise stores around the country.

According to PYMNTS, U.S. District Judge Jose Martinez in Miami stated earlier this month that the plaintiffs had presented sufficient evidence to proceed with the case, which now moves to the discovery and litigation phases. Martinez also decided that the Burger King “no-hire” policy constituted an “unreasonable” constraint on the labor market.