Two franchisees for the fast-food giant have filed for bankruptcy in 2023.
, Meridian reported a drop in foot traffic at its restaurants over the last several years that has resulted in lower revenues. And while traffic declined, the franchisee didn't see any relief or decreases in its rent, debt service, and liabilities. Additionally, the company struggled since its acquisition of the Burger King restaurants, which were underperforming from the start.
"These lower volumes result in smaller profit margins, and thus greater sensitivity to the recent dramatic rise in labor, commodity, and maintenance costs," court documents said."As a result, although certain of the restaurants are profitable, others operate at a loss, and have for many years, resulting in the Debtors' inability to meet financial obligations timely."
In light of the bankruptcy filing, it remains unclear what the future holds for Meridian's Burger King locations, which are sprinkled across Utah, Montana, Wyoming, North Dakota, South Dakota, Minnesota, Nebraska, Kansas, and Arizona. But Meridian believes it can improve its financial situation moving forward through measures like increased marketing, waste reduction, and restructuring some of its assets and obligations. The franchisee hopes these moves will"free up cash flow to support day to day operations and management objectives to become a healthy and thriving business," the court documents said.for the Burger King brand.
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