A major Burger King franchisee with dozens of locations has filed for Chapter 11 bankruptcy.
Consolidated Burger Holdings, based in Destin, Florida, filed the court documents this week in the U.S. Bankruptcy Court for the Northern District of Florida. The franchisee now operates 57 Burger King restaurants in Florida and Georgia, after it reportedly closed 18 locations before its Chapter 11 filing.
“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,” Consolidated Burger said in the filing. The documents also cited “significant hurdles resulting from industry headwinds,” resulting in financial turbulence for the franchisee.
According to the documents, sales plummeted in the past two fiscal years. In 2023, the franchisee documented $76.6 million in sales and a net operating loss of $6.3 million. Last year, sales were down to $67 million with an amplified operating loss of $12.5 million.
Consolidated Burger plans to continue operating during the bankruptcy proceedings and has been seeking a buyer. It listed assets at $78 million in the court documents.
It’s unmistakably a tough time for restaurant franchisees, between rising food costs, as well as higher labor costs and slower foot traffic—and that’s before restaurant owners begin to feel the impact of Trump’s tariffs. To get more customers in the door, fast food chains have been offering budget meal deals: Last year, Burger King launched a $5 meal deal promotion, similar to one McDonald’s was running.
Still, on the whole, Burger King’s sales have been moving in the right direction. According to QSR, which monitors data on quick serve restaurants, the Burger King chain itself outperformed its peers in Q4 with a 1.5% increase in same-store sales compared to 1.2% increase among competitors.
Last year, Burger King’s parent company, Restaurant Brands International (RBI), dumped more money into its ambitious restaurant remodeling plans for locations in the U.S. and Canada. RBI also bought Burger King’s largest U.S. franchisee, Carrols Restaurant Group, for $1 billion to expedite the process. RBI said it planned to spend about $2.2 billion on the remodels, and said that by 2028, 85% to 90% of its roughly 7,000 restaurants will be upgraded.
At the time, Burger King U.S. President Tom Curtis told CNBC about the investment, saying, “It was the first time in a long time that RBI had invested a significant amount of capital back into the business to coinvest with franchisees.” Curtis continued, “I think the process was, ‘Let’s see how this works’ . . . and we’re seeing early results on remodels.”