One of the largest Burger King franchisees in the United States has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Florida, according to court documents signed by Chief Restructuring Officer Joseph J. Luzinski on April 14.
The company’s financial struggles grew worse over the past two years. For the fiscal year ending 2023, Consolidated Burger Holdings reported sales of $76.6 million but suffered a net operating loss of $6.3 million. In 2024, sales dropped to $67 million, with net operating losses deepening to $12.5 million. As of Dec. 31, 2024, the company’s balance sheet reflected assets and liabilities of approximately $77.9 million each.
Luzinski detailed the operational scope of the business, noting that the 57 Burger King locations are divided among three main geographic areas: Tallahassee and Southern Georgia with 18 restaurants, South Florida with 19 restaurants, and the Florida Panhandle with 20 restaurants. The franchisee employs 773 workers, most of which are part time restaurant employees. None of them are represented by unions.
Luzinski attributed the company’s worsening financial position to a combination of industry-wide factors, in a description of events leading to the bankruptcy filing.
“Additionally, recent increases in costs of shipping and food, decreased availability of labor, and inflation generally have exacerbated the Debtors’ cash flow issues,” Luzinski stated in his declaration to the court. “As a result, although certain of the Restaurants have remained profitable, others have been operating at a loss, resulting in the Debtors’ inability to meet their obligations and achieve the financial metrics required under various agreements.”
The filing follows a failed seven-month effort to sell the company’s assets. Peak Franchise Capital LLC, retained in July 2024 to market the business, contacted 235 potential buyers and entered confidentiality agreements with 32 of them that ultimately ended in no sales.
As of the petition date, the company had just $179,000 in unrestricted cash, which Luzinski stated isn’t enough to meet ongoing obligations without additional funding.
To maintain operations during the bankruptcy process, Consolidated Burger Holdings has secured a commitment for $1.6 million in debtor-in-possession financing from the Auxilior Lender.
The company has also filed a series of “first day” motions to provide some relief during the process, including requests to pay employee wages and benefits, maintain insurance policies, and continue vendor relationships. Luzinski said in his pleading to the court that approval of such motions are critical to preserve what’s left of the business and avoid “immediate and irreparable harm” to the company’s estate.
Last year, at least a dozen restaurant chains had entered bankruptcy proceedings, including notable brands such as Buca di Beppo, Roti, and World of Beer, each citing a mix of inflation, high interest rates, and continued operational challenges as key factors.
Other chains, including Rubio’s Restaurants, Melt Bar & Grilled, and Kuma’s Corner, also sought bankruptcy relief last year.