Iconic fast-food chain operator files Chapter 11 bankruptcy

Fast-food restaurant chains face various challenges to conquer and stay in business.

Competition among chains, whether or not they're burger, pizza, or chicken restaurants, has been fierce for various years. The Covid-19-19 pandemic in 2020 brought new challenges as restaurants needed to control to a fresh business model, often closing their dining rooms and transitioning to all-take-out, drive-thru, and delivery products and services they'll no longer have during the past offered.

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As restaurant companies and their franchisees recovered from the difficulties of the pandemic, they faced a fresh set of challenges with rising inflation, high rates of interest, higher labor costs, and changing consumer preferences.

Related: Bankrupt pizza chain operator unloads dozens of restaurants

These new challenges have led restaurant chains to file for financial disaster protection to reorganize their debts to continue operating. On some occasions, restaurant owners have been forced to shut locations to cut losses.

Fast-food franchise restaurant operator EYM Group operates Burger King, Denny's, Pizza Hut, Panera Bread, and Kentucky Fried Chicken franchises in seven states, including Florida, Georgia, Illinois, Indiana, South Carolina, Texas and Wisconsin.

The company's EYM Pizza affiliate filed for Chapter Eleven protection in July related to a lawsuit Yum Brands (YUM) filed against the franchisee about its Pizza Hut royalty payments.

While it should be unclear if the financial disaster filing and lawsuit are affecting the company's EYM Chicken affiliate, the company has reportedly closed 25 of its Forty seven KFC locations.

RRG Inc., a Popeyes franchise operator of 17 Georgia locations, in February 2024 filed for Chapter Eleven financial disaster as three failing locations were driving down every of the operator's other restaurants.

Related: Financial disaster filing can’t rescue popular retail food brand

"Debtor is filing financial disaster on account of failing locations," the debtor wrote in its financial disaster filing. "Debtor has approximately three Popeye’s restaurants which have significantly lost money and resulted in a financial burden on the continued operation of the remainder restaurants. Debtor has fallen at the back of on lease payments of remaining profitable restaurants and wishes to cure those arrearages to avoid lease termination."

And now, a legendary fried chicken restaurant chain dating back to the Fifties is facing a Chapter Eleven financial disaster filing.

Iconic fast-food chain franchise operator Original Harold's Chicken of Nevada on Oct. Four filed for Chapter Eleven financial disaster seeking to reorganize its business.

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The company, which operates Original Harold's Chicken locations in North Las Vegas and Henderson, Nev., listed $Forty,000 in debts, but no assets in its petition. The debtor did no longer indicate a particular cause of filing financial disaster.

The short-food chicken franchise indicated that no funds should be reachable for distribution to unsecured creditors after administrative expenses are paid.

The Original Harold's Chicken restaurant chain, established in Chicago in 1950, operates 46 locations in eight states, including Arizona, California, Georgia, Illinois, Indiana, Missouri, Nevada and Texas.

Founder Harold Pierce launched his first restaurant in an African-American neighborhood in Chicago on Thirty ninth Boulevard out of necessity. Larger fast-food chains steer clear off such neighborhoods, and legal and social obstacles within the Fifties prevented Black-owned businesses from locating in Chicago's downtown or North Side, in step with Original Harold's websites.

Pierce's restaurant chain would soon was one in every of the many many few examples of a a success Black-owned fast-food chain that primarily served the Black community. Almost seventy 5 years later, Harold's now has thirteen locations at some stage in Chicago and 46 units across the nation.

The Chicago-based fast-food chain had other difficulties with its restaurant locations recently. A location on East forty seventh Boulevard within the Windy City in June 2024 was closed by the Illinois Department of Revenue for undisclosed tax reasons.

Harold's Chicken on 87th Boulevard in Chicago closed permanently in July 2020 when it didn't negotiate a fresh lease after the owner raised the rent by Forty%.

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