Chapter 11: Burger King Franchisee Hits Financial Trouble

Petition for bankruptcy document with pen.

Burger King franchisee Consolidated Burger Holdings files for Chapter 11 bankruptcy with a staggering $37 million debt, putting 57 restaurants and hundreds of jobs at risk amid rising costs and plummeting revenues.

Quick Takes

Consolidated Burger Holdings, operating 57 Burger King locations in Florida and Georgia, has filed for Chapter 11 bankruptcy protection with nearly $37 million in debt.
The company reported a $12.5 million operating loss in fiscal 2024, with revenue falling from $76.6 million to $67 million in just one year.
Rising labor costs, inflation, and decreased foot traffic without corresponding reductions in fixed expenses like rent drove the financial collapse.
This bankruptcy marks the latest in a string of major Burger King franchisee failures, as several operators collectively running hundreds of locations filed for bankruptcy protection in 2023.
Parent company Restaurant Brands is investing $2.2 billion in its “Reclaim the Flame” initiative to revitalize the Burger King brand by 2028.

Financial Collapse Under Inflation and Labor Pressures

Consolidated Burger Holdings, a significant Burger King franchisee operating 57 restaurants across Florida and Georgia, has filed for Chapter 11 bankruptcy protection after accumulating nearly $37 million in debt. The company, which runs locations throughout the Florida Panhandle and southern Georgia, including cities like Valdosta, Tallahassee, West Palm Beach, and Naples, reported assets and liabilities each totaling approximately $78 million. The bankruptcy filing represents one of the largest collapses among Burger King franchise operators in recent years, adding to the chain’s franchisee struggles during the post-pandemic period.

The franchisee’s financial decline has been dramatic, with annual sales dropping from $76.6 million to $67 million in just one year. More alarming is the widening losses, which doubled from $6.3 million to $12.5 million during the same period. Despite these mounting financial challenges, the company plans to maintain operations while pursuing a court-supervised sale process for its assets. Court documents reveal the franchisee has been actively seeking a buyer for approximately seven months, suggesting a prolonged struggle to remain viable.

A 57 unit Burger King franchisee filed for bankruptcy earlier this week.

They did $67M in sales in 2024, at a loss of $12.5M.

The franchisee debt totals $36M.

This follows a 90 unit owner, and 118 unit Burger King owner who went bankrupt in 2023.

Tough out there for BK zees pic.twitter.com/FpWuJUY80y

— Pat Buckley | FranDawgs 🌭 (@TheFranDawg) April 18, 2025

Post-Pandemic Struggles and Legal Disputes

The COVID-19 pandemic dealt a devastating blow to Consolidated Burger Holdings’ operations, creating a perfect storm of negative business conditions. Customer traffic plummeted while fixed costs like rent and debt service remained stubbornly high. This imbalance created unsustainable pressure on the franchisee’s financial structure, which was already heavily leveraged before the pandemic struck. The company now owes $36.64 million to fewer than 1,000 creditors, highlighting the depth of its financial predicament.

Complicating matters further, Burger King sued the franchisee in January 2024 for failing to fulfill agreements regarding restaurant remodeling and improvements. Although the parties reached a settlement in September, the dispute underscores the challenges franchisees face in meeting brand standards during financial distress. Consolidated Burger claimed to have invested millions in upgrades across its locations, but these investments apparently failed to generate sufficient returns to sustain the business amid broader economic headwinds.

Industry-Wide Franchisee Struggles

The bankruptcy filing by Consolidated Burger Holdings is far from an isolated incident in the Burger King ecosystem. Throughout 2023, several major franchisees filed for bankruptcy protection, including Meridian Restaurants Unlimited, Toms Kings, and Premier Kings, which collectively operated 378 restaurant locations. This disturbing trend points to systemic challenges within the quick-service restaurant industry, particularly for operators with high debt loads and insufficient capital reserves to weather prolonged economic disruptions.

Parent company Restaurant Brands International appears to be pivoting its strategy in response to these franchisee struggles. The company is focusing on partnering with financially stronger operators committed to long-term investment in the brand. In a significant move reflecting this strategy shift, Restaurant Brands acquired its largest franchisee, Carrols, which operated over 1,000 locations. The parent company is also investing heavily in brand revitalization through its “Reclaim the Flame” initiative, with plans to spend $2.2 billion and redesign up to 90% of U.S. locations by 2028.

Corporate Response and Future Outlook

While individual franchisees struggle, Restaurant Brands International continues to show overall corporate strength. The parent company, which also owns Tim Hortons, Popeyes, and Firehouse Subs, reported a 19.7% revenue increase to $8.4 billion in 2024. This contrast between corporate performance and franchisee struggles raises questions about the sustainability of current franchise models in the fast-food industry, particularly as labor costs continue to rise and consumer preferences evolve in the post-pandemic economy.

For the 57 Burger King locations operated by Consolidated Burger Holdings, the future remains uncertain. The court-supervised sale process will determine whether these restaurants continue operating under new ownership or face closure. While Burger King works to transfer troubled restaurants to high-performing operators, the pattern of franchisee bankruptcies suggests deeper structural issues that may require fundamental changes to the traditional franchise business model to ensure long-term viability in today’s challenging economic environment.