A franchisee that operated 49 IHOP locations in the Southeast has closed its restaurants and filed for Chapter 11 bankruptcy protection, according to court documents. The bankruptcy was brought about due to “safer at home orders” resulting from the COVID-19 pandemic, the documents said.
CFRA Holdings LLC and CFRA Tri-Cities LLC filed for the protection on May 7 in the bankruptcy court for the middle district of Florida in Tampa. It operated restaurants in North Carolina, South Carolina, Tennessee and Virginia, but is headquartered in Pinellas County in Florida.
CFRA and its affiliates had gross revenue of $78.3 million in 2019 and have debt of around $22.7 million.
All employees had been paid and laid off before the filing, the documents said.
Dine Brands Global, the parent company of IHOP, said it had terminated franchise agreements for the restaurants last month.
“In April, we sent notices terminating the franchise agreements for all 49 restaurants operated by CFRA Holdings LLC and its affiliates. We are working to welcome guests back into IHOP restaurants as soon as possible in the impacted areas,” and IHOP company spokesperson said.
IHOP, like many restaurants across the country, had been hit hard by the pandemic, with sales at about 25% of normal, according to Dine Brand’s latest earnings report.
Restaurants in Tennessee and South Carolina have been permitted to open their dining rooms with limited capacity in recent weeks. Virginia restaurant patios were slated to open at 50% capacity on May 15. North Carolina dining rooms remain closed.
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