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BurgerFi Files for Chapter 11 Bankruptcy

BurgerFi, the restaurant chain known for its higher-quality burgers, has filed for Chapter 11 bankruptcy protection on Tuesday, less than a month after it warned investors of its uncertain future. This news comes as another blow to the struggling restaurant industry, which has been grappling with declining traffic and rising interest rates.

BurgerFi's Bankruptcy: A Growing Trend in the Restaurant Industry

BurgerFi's bankruptcy filing adds to a growing list of restaurant chains that have sought bankruptcy protection to restructure their operations. The company joins other well-known brands like Red Lobster and Buca di Beppo, highlighting the challenges facing the restaurant industry.

BurgerFi's Journey: From IPO to Bankruptcy

• Founded in 2011, BurgerFi achieved a public listing in 2020 through a special purpose acquisition company (SPAC) deal. SPACs gained popularity at the time due to their quicker process and less stringent regulatory oversight compared to traditional initial public offerings (IPOs).
• BurgerFi expanded its business by acquiring Anthony's Coal Fired Pizza & Wings in 2020 for $156.6 million, adding another brand to its portfolio.

Financial Challenges Facing BurgerFi

BurgerFi's financial struggles are evident in its recent performance. For the quarter ending April 1, 2024, the company reported a net loss of $6.5 million despite revenue reaching $42.9 million. Same-store sales, a key indicator of restaurant chain performance, declined by 13% for BurgerFi's namesake burger brand during this period.

BurgerFi's Debt and Asset Situation

According to the bankruptcy filing, BurgerFi has assets ranging from $50 million to $75 million, while its total debt falls between $100 million and $500 million. This significant debt burden has likely played a major role in the company's financial difficulties.

Franchise Model and Restaurant Count

• BurgerFi operates a franchise model, with approximately half of its 162 restaurants (as of April 1, 2024) being run by franchisees.
• The company's portfolio includes both BurgerFi and Anthony's Coal Fired Pizza & Wings locations.