BurgerFi announced Thursday that the fast-casual burger concept and owner of Anthony’s Coal Fired Pizza would be “considering strategic alternatives” as the company looks to address continued fiscal challenges. BurgerFi has entered into a forbearance agreement with its existing creditors, with a relief period extending to at least July 31. Additionally, its lenders, L Catterton and TREW, have agreed to lend the company $4 million in total during this “strategic review process.”
According to recent Technomic data, BurgerFi’s sales were down 7.5% from 2022 to 2023, and its unit counts were also down 5.3% year-over-year, with a closure of six underperforming stores. Comparatively, the rest of the fast-casual burger sector has been on an upward growth trajectory, with average sales growth of 8%. The sector is led by Shake Shack, Hopdoddy, and Freddy’s Frozen Custard & Steakburgers, all of which had double-digit sales growth last year, and have been developing rapidly in new markets. In fact, BurgerFi is one of only three fast-casual burger chains to have reported a sales loss in 2023, alongside Smashburger and Fuddruckers.
After acquiring Anthony’s Coal Fired Pizza in Oct. 2021, the company’s sales stagnated rather than grew, and have been on a downward trajectory since its peak in 2021, according to Technomic data. Despite this, then-CEO Ian Baines said BurgerFi was looking for more brands to acquire, as of Jan. 2023.
Earlier this year, the company underwent a CEO change, with former Smashburger president Carl Bachmann now helming the brand. In a January interview with NRN, Bachmann said that he was learning from the mistakes of the brand’s past and implied that the company had “lost its way.” His goal was to improve taste standards of both brands’ products and increase menu innovation. This has culminated in the release of BurgerFi’s first chicken sandwiches earlier this month, available both in grilled and fried formats, as the company enters the very crowded chicken sandwich sector.
As BurgerFi continues to try to rectify past missteps and turn around its concerning financial situation, it’s not guaranteed that these efforts will help in the long-run:
“There can be no assurance, however, that the strategic review process will result in an outcome favorable to the company or its stakeholders,” BurgerFi’s Thursday press release said. “The company does not currently intend to comment further on this strategic review process and will make further announcements in accordance with its ongoing disclosure obligations and pursuant to applicable laws and regulations.”
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