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HomeBusinessBurger King Franchisee Sells Off Almost 60 Locations in Bankruptcy

Burger King Franchisee Sells Off Almost 60 Locations in Bankruptcy

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Burger King is facing significant bankruptcy issues as a result of the COVID-19 pandemic. The fast food chain, which was once known for its higher prices compared to competitors, has been unable to recover from the challenges posed by the pandemic. Factors such as increased wages, shipping and operational costs, food inflation, and declining traffic have led to financial difficulties for the franchise. Meridian Restaurants Unlimited LLC, the owner of Burger King, also owns Black Bear Diner, which may now take the spotlight as Burger King struggles.

To address these financial challenges, Burger King announced a $400 million “Reclaim the Flame” comeback plan in September 2022. As part of this plan, the chain will be closing 300 to 400 restaurants across America and eliminating underperforming franchisees. This decision is similar to Applebee’s, which is set to close 25 to 35 restaurants by the end of 2023 due to similar performance issues. While the closure of Meridian’s units may be a disappointment for Burger King, it aligns with the company’s focus on geographical concentration. The chain plans to handle franchisees differently in the future, limiting operators to 50 stores within the same region, in order to prevent large franchisees from facing bankruptcy court.

In conclusion, Burger King is grappling with major bankruptcy issues caused by the lasting effects of the COVID-19 pandemic. The chain’s struggles are attributed to various factors, including increased costs and declining traffic. In response, Burger King has announced a comeback plan that involves the closure of several underperforming restaurants across the country. This aligns with the company’s shift towards geographical concentration and a new approach to franchisees. By limiting operators to a set number of stores within a specific region, Burger King hopes to avoid the need for federal bankruptcy court proceedings in the future.

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