This Beloved Local Burger Chain Just Filed for Bankruptcy
The fast casual restaurant cited debts of more than $8 million dollars and flagging sales amid COVID.
With mandated closures of in-person dining spaces across the country in the early months of COVID, restaurants have had an uphill battle recovering financially from the fallout of the pandemic. In 2020 alone, more than 110,000 restaurants and bars shut their doors temporarily or for good, according to the The National Restaurant Association's 2021 State of the Restaurant Industry report; however, even more have filed for bankruptcy.
Now, a popular local burger chain has filed for Chapter 11 bankruptcy protection amid serious financial strain related to the pandemic. Read on to discover if a restaurant in your area is affected by the bankruptcy news. And for more popular dining establishments facing serious trouble, This Iconic Mexican Restaurant Just Filed for Bankruptcy.
Meatheads Burgers & Fries has filed for Chapter 11 bankruptcy.
On April 9, fast casual chain Meatheads Burgers & Fries filed for Chapter 11 bankruptcy protection in the Northern District of Illinois. The chain's parent company, Crave Brands LLC, filed for Chapter 11 bankruptcy protection the same day.
The 14-year-old chain operates 13 restaurants in the Chicagoland area—down from a high of 17 restaurants in 2017—and employs a total of 161 full-time and part-time employees, Restaurant Business reports. And for the latest restaurant closure news delivered straight to your inbox, sign up for our daily newsletter.
The chain owes more than $8 million to creditors.
In its bankruptcy filing, the chain disclosed financial obligations to the tune of $8.4 million, but assets of just $6.7 million, Restaurant Business reports. During its first decade in business, Meatheads had eschewed the franchise model on which many other casual dining and fast food restaurants operate, but had reconsidered this stance just a few years ago.
"We plan to expand as rapidly as the success of our operating restaurants allow us," Meatheads founder and former CEO Tom Jednorowicz told Fast Casual in 2017. "We are more focused on execution at the restaurant/community level and developing one successful restaurant after another than we are on the accumulation of big numbers."
And for another group of restaurants struggling, check out This Popular Pizza Chain Just Filed for Bankruptcy.
Meatheads had recently received more than $1 million in Paycheck Protection Program funding.
After suffering an 18.9 percent dip in sales between 2019 and 2020, and the closure of all of its in-person dining between March and early May of 2020, the chain applied for and received more than $2.4 million in Paycheck Protection Program (PPP) funding between 2020 and 2021.
Parent company Crave Brands had also received $149,000 in Economic Injury Disaster Loan payments. And for more restaurants buckling amid the pandemic, This Iconic Restaurant Chain Is Closing Even More Locations.
The chain's creditors have moved to have the bankruptcy filing dismissed.
LQD Financial, which provided Meatheads a $6.65 million loan at 17 percent interest in 2019, has moved to have the chain's bankruptcy filing dismissed, calling it a "stunt Crave's former manager pulled to stay in charge."
It was in 2019 that Meatheads' founder and former CEO Jednorowicz departed from the company, selling it to Crave, and installing Michael Webb as the company's new CEO. That same year, the chain's franchise in Elmhurst, Illinois closed its doors, with no new Meatheads locations opening since. And for more surprising closures, This One Thing Is Disappearing From Walmarts Nationwide.