- January 6, 2023 / 4 min readThe group has cited pandemic-driven revenue decline and increased overhead costs as one of the main reason for its failure.
TOMS King Holdings, an Illinois-based Burger King franchisee has put its subsidiaries operating 90 stores in bankruptcy.
The group has cited pandemic-driven revenue decline and increased overhead costs as one of the main reason for its failure.
The company is one of largest franchisees of Burger King in the region and operates at four locations namely; Illinois, Ohio, Pennsylvania and Virginia.
It filed for Chapter 11 bankruptcy protection with $35.5 million in secured debt and another $14 million in unsecured obligations, according to court documents. And wants to sell its restaurants through the bankruptcy process, reported QSRweb.com.
TOMS in court filings said that its business “suffered significantly from [a] loss of foot traffic, resulting in declining revenue without proportionate decreases in rental obligations, debt service and other liabilities.”
The company then noted that higher costs for shipping and food, a lack of labor and overall inflation exacerbated its problems with cash flow. While some of TOMS’ restaurants are profitable, the company said, others are losing money, making it unable to make its debt payments.
The group started working with its lenders and its franchisor to restructure last year. The company hired a restructuring advisor that ultimately recommended filing for bankruptcy. The company appointed RJ Dourney, the former CEO of the bakery-café chain Cosi, to be an independent manager of the business. It also appointed Daniel Dooley, CEO of the consulting firm MorrisAnderson, to be its chief restructuring officer.
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