As 2024 continues to be a rough year for restaurant chains, yet another well-known brand appears to be teetering on the brink. In a filing with the Securities and Exchange Commission (SEC) on Friday, BurgerFi International reported significant recent sales drops and warned investors of a potential future bankruptcy filing.
According to its company profile, the fast-casual chain, which bills itself as the home of “better burgers,” was founded in 2011 and currently includes about 120 franchised and corporate-owned restaurants. Its parent company, BurgerFi International, also owns a pizza and wings brand called Anthony’s with more than 60 locations.
In 2020, BurgerFi International stock went public after the company merged with a special purpose acquisition company (SPAC)—a strategy that became a trendy way for companies to enter the stock market during the pandemic. However, based on reports from Bloomberg, at least 21 companies that took the SPAC merger route went bankrupt in 2023 alone. Now, it seems like BurgerFi International might be poised to join their ranks.
We’ve reached out to BurgerFi for additional comment.
Declining sales, closing locations
In Friday’s SEC filing, BurgerFi reported that it would be unable to file its most recent quarterly report “without unreasonable effort and expense.” The company said it anticipates that year-over-year restaurant sales since July 3, 2023 decreased by approximately $1.8 million, or 4%. The decline was attributed to “a decrease in same-store sales at BurgerFi and Anthony’s, including the closure of underperforming BurgerFi corporate-owned locations.”
If BurgerFi International’s financial obligations cannot be sufficiently met, the company said “it may seek protection under applicable bankruptcy laws.” The warning comes after BurgerFi International received $2.5 million in emergency funds earlier this month.
Unfortunately, BurgerFi’s financial woes aren’t particularly unusual. Many fast-food chains have faced falling sales numbers due to inflation in 2024, leading consumers to view grabbing a quick bite as a luxury more than a convenient option.
In the first half of the year, chains including TGI Fridays, Bloomin’ Brands, Hooters, and Denny’s all closed underperforming locations. Others, like Rubio’s, Tijuana Flats, Sticky’s Finger Joint, and, most notably, Red Lobster, filed for bankruptcy.
For now, BurgerFi says it’s exploring strategic alternatives, including seeking additional financing by selling either a portion of its assets or the entire company.
Shares of BurgerFi International sank more than 10% on Monday. The stock was trading at around 33 cents a share as of midday.