Burger King in trouble as large franchise owner declares bankruptcy

Many Burger King fans in Florida and Georgia may soon notice a reduction in the number of locations available to them. This is because one of the fast-food chain’s significant franchise operators has made the decision to file for bankruptcy.

Consolidated Burger Holdings, responsible for running 75 restaurants in the aforementioned states, began closing down around 20 of its locations prior to officially seeking Chapter 11 protection last week.

That brings its total store count down to 57 — and more closures could be on the way as it looks to cut costs during bankruptcy. 

The recent bankruptcy filing by Consolidated Burger Holdings follows similar actions taken by other prominent Burger King franchise operators like TOMS King and Meridian Restaurants, who have also resorted to bankruptcy in the last couple of years.

Consolidated says it still plans to upgrade and remodel some restaurants, but it’s also looking to sell off assets through a court-supervised sale. 

Many of its restaurants are still open, and some remain profitable. But others have struggled due to rising food and labor costs, inflation, and slowed foot traffic since the pandemic.

Burger King said that struggling franchisees will be replaced by ‘high-performing operators’ to improve service and experience at affected stores. 

Burger King’s corporate owner says the overall brand is still going strong — with same-store sales growing and plans to significantly boost revenue per location over the next few years. 

Burger King franchisee Consolidated Burger Holdings filed for bankruptcy last Monday in Florida

Consolidated says it has over $36 million in debt but recently secured $1.6 million in new financing to help keep things running during the restructuring. 

The bankruptcy comes after years of financial struggles for Consolidated that began during the Covid-19 pandemic. 

In addition to the pandemic, chief restructuring officer Joseph Luzinski revealed the rising food and shopping costs, labor decreases, and inflation were factors in financial issues.

Some of the restaurants managed to stay profitable, while others failed to meet sales requirements.

Consolidated has spent millions of dollars on restaurant upgrades, improvements, and remodels. These changes include new roofs, parking lots, and HVAC systems.

It was not enough for the company to grow in sales, and earned $67 million in 2024 revenue, $10 million less than the previous year.

On top of that, Consolidated Burger Holdings faced legal challenges with Burger King, resulting in a 2024 lawsuit over financial agreements.

The franchisee reached a settlement with Burger King later that year for an undisclosed amount. 

Multiple Burger King franchisees have filed for bankruptcy over the last couple years following financial losses 

Burger King experienced a sales boost, which contributed to its parent company’s rise in same-store sales 

Consolidated Burger Holdings is not the only franchisee that has completed a bankruptcy filing over the last couple of years.

TOMS King, which was one of the chain’s largest franchisees, also filed for bankruptcy in January 2023.

Three months after filing, it received bids from other companies wanting to purchase 82 of 90 locations.

Meridian Restaurants Unlimited operated 118 stores before filing in March 2023.

It closed restaurants and sold 70 locations to other franchisees for roughly $17.5 million later that year.

‘The Burger King system is far stronger today because of our focus on great Franchisees who are committed to investing in their restaurants and teams for the long-term,’ a Burger King spokesperson told DailyMail.com. 

‘This means a small number of franchisees who are no longer investing in their restaurants will be exiting the system.

‘We are working quickly to get these restaurants transferred to high-performing operators who can provide a best-in-class Burger King experience,’ they continued.

While franchisees have struggled to stay afloat, the chain itself has successfully boosted sales.

Burger King’s parent company, Restaurant Brands International, reported a boost in same-store sales, which was in part due to the chain’s revenue growth.

The chain is looking to earn $230,000 per restaurant yearly by the end of 2026, and raise it to $300,000 in the future.

Some of Burger King’s competitors weren’t so lucky with sales expectations.

McDonald’s fourth quarter revenue fell short of Wall Street Journal’s expectations partially due to its massive E.coli outbreak.

A once-popular Florida burger chain EVOS skipped bankruptcy filing, and abruptly closed all its restaurants earlier this month.