BurgerFi International Inc. — the Ft. Lauderdale, Fla.-based fast-casual burger chain and parent to Anthony’s Coal Fired Pizza — has filed for Chapter 11 bankruptcy protection. According to the filing in the District of Delaware, BurgerFi and Anthony’s have accumulated between $50-$100 million in assets, and up to $500 million in debt.
The company declared bankruptcy less than one month after warning investors of this potential outcome in a 10-Q form filed with the U.S. Securities and Exchange Commission, noting at the time that it could not report its latest quarterly earnings by the requisite deadline due to “significant adverse developments that occurred with respect to the company’s business and liquidity.”
Just prior to that, BurgerFi had received $2.5 million in funding from Trew Capital Management Private Credit 2 LLC, and was required to illustrate the company’s intent to use the funding to settle its credit obligations. As early as May, BurgerFi had announced that it had begun to consider “strategic alternatives” and had entered into a forbearance agreement with existing creditors extending to July 31.
BurgerFi had been battling financial challenges for some time now, following the acquisition of Anthony’s Coal Fired Pizza in Oct. 2021, after which sales stagnated rather than grew, and have been on a downward trajectory since their peak in 2021.
Earlier this year, the company underwent a CEO change, with former Smashburger president Carl Bachmann taking over as head of the company. Following his appointment in an interview with NRN, Bachmann admitted that the company had “lost its way,” and his goal was to improve both brands’ products and menu innovation.
Last month, BurgerFi hired Jeremy Rosenthal as its chief restructuring officer and according to the Ch. 11 filing, “is authorized, empowered, and directed, with full power of delegation, to negotiate, execute, deliver, and file with the bankruptcy court,” while Bachmann is not named in the filing at all.
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, led by brands like Shake Shack and Hopdoddy, has been on an upward growth trajectory, with average sales growth of 8%.
Contact Joanna at [email protected]
