Five Bankruptcies in Restaurant Chains That Shake the Industry in 2021
The restaurant industry was still plagued by bankruptcies well into 2021. These were not limited to full-service restaurants, casual dining, and fast-food chains. Many brands that survived 2020 failed to make it in 2021. Due to COVID-19 restrictions, and declining sales, many brands that survived 2020 struggled to find their feet in 2021. Supply chain problems and changing consumer behavior. Due to mounting debts, many brands had to close their doors. They filed for Chapter 11 protection or found an investment firm that would purchase them out of bankruptcy.
While there were fewer bankruptcies in 2020 than the ones that affected other brands like Chuck E. Cheese or Le Pain Quotidien, 2021 saw more restaurant closures than it could handle.
Cici's was resold and D&G Investors bought it
Cici's Pizza had already begun to show signs of decline before the pandemic. Between 2017 and 2019, the Texas-based chain saw its total sales drop by 10%. The total sales of the Texas chain dropped by about 10% between 2017 and 2019. Cici's 2020 revenue fell by $100 million. The net loss was $2.7 million. The chain declared bankruptcy in January and stated that it would be transferring its ownership to D&G Investors. The new parent company aims to restore the chain to its former glory.
Major Jack in the Box franchise was disbanded
Jack in the Box might not have fared well during the pandemic. The company reported a 13.1% sales growth in the last year. Each region is different. Conquest Foods LLC is an example. In February, the company and two affiliates filed for bankruptcy. It had 70 employees. They applied for Chapter 11 debt protection, declaring liabilities between $10 million and $50 million.
Golden Corral's second-largest franchisee nosedived
Golden Corral was hit by the pandemic just like other buffet restaurants. The chain's largest franchisee filed for bankruptcy in 2020 and several of its locations were closed. Platinum Corral, the second-largest franchisor, filed for bankruptcy in April 2021. At the time of filing, the 28-restaurant company owed $49.4 million. Paycheck Protection Program owed $6.7 million in loan repayments.
Casa Bonita went downhill
Casual dining was decimated as well as full-service restaurants. Casa Bonita, a fan favorite, was also among the victims. A popular Colorado establishment--offering its patrons a unique combination of casual dining and tropical-themed live entertainment--the restaurant was forced to close at the start of the pandemic. In April 2021, the parent company filed for Chapter 11 bankruptcy protection. Soon after, it declared bankruptcy. It filed for bankruptcy revealing that it had $4.4 million in liabilities and $3.7million in assets. It was bought by South Park's creators.
Creditors had issues with the parent company
Meatheads, a Chicago-based hamburger restaurant chain, had a quiet 2021. In April, its parent company Craves Brands filed Chapter 11 bankruptcy. One of Crave Brands' principal creditors challenged the filing. He claimed Crave had only filed for protection to "keep control". The companies have reached an agreement. Crave Brands is now insolvent and will resume operations as the Meatheads franchise.
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