A national burger chain now files an unexpected bankruptcy after its parent company listed up to $500 million in liabilities.
BurgerFi has officially filed for bankruptcy, marking the culmination of several months of significant financial challenges for the fast-casual restaurant chain.
In May, the company began exploring strategic options to address its financial woes, including seeking additional financing, selling off some assets, and finding new ways to improve cash flow.
Throughout 2023, BurgerFi International has faced declining same-store sales, with a notable 13% drop at BurgerFi and a 2% decrease at its sister brand, Anthony’s Coal Fired Pizza & Wings.
Although the chain reported a reduced net loss of $30.7 million for the year, compared to $103.4 million in 2022, it has continued to struggle with profitability.
In August, BurgerFi appointed a chief restructuring officer just days after expressing serious doubts about its ability to continue operations due to its challenging liquidity situation.
The company indicated that bankruptcy could be on the table if it did not receive sufficient relief from its senior lenders or a much-needed cash injection.
Compounding its difficulties, Nasdaq issued deficiency notices to BurgerFi in late August, citing the company’s failure to file its quarterly report within the mandated 45-day timeframe.
Additionally, the exchange noted that the company did not meet the required number of board members following the resignation of three directors earlier that month.
As BurgerFi navigates this challenging period, the future remains uncertain as it seeks to stabilize its operations and recover from its financial setbacks.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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