The fast-food burger chain sector is facing an array of issues that has led to dozens of restaurant closings and several bankruptcy filings.
The fierce competition from the top four burger chains — McDonald’s, Wendy’s, Burger King, and Sonic — with their huge advertising budgets is a major obstacle for smaller chains. Aside from competing with the top burger chains, smaller chains also deal with the same industrywide issues that the big chains face, such as rising labor and food costs driven by inflation and changing attitudes of consumers toward eating out.
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Even the major burger chain franchisees are struggling with economic problems that have forced some of them into bankruptcy and restaurant closings.
Related: Popular breakfast chain franchise files for Chapter 11 bankruptcy
Burger King franchisee Meridian Restaurants Unlimited owned 120 locations when it filed for Chapter 11 bankruptcy in March 2023, QSR Magazine reported at the time.
The debtor had 91 restaurants when it held a bankruptcy auction in September 2023 and sold 70 units to the Burger King parent company and four franchisees for about $17 million. There were no qualified bids for the remaining 21 locations.
Two other Burger King franchisees, Toms King, which owned 90 locations, and Premier Kings, which had 172 locations, also filed for Chapter 11 in 2023.
Smaller burger chains file for bankruptcy
Burger chains continued having financial problems in 2024 as BurgerFi, which owned and franchised 144 burger and pizza restaurants nationwide, on Sept. 11, 2024, filed for Chapter 11 bankruptcy protection after its turnaround plan, implemented earlier in 2024, failed to save it from reorganizing.
BurgerFi faced a steep decline in post-pandemic consumer spending because of inflation and increased food and labor costs and needed to stabilize the business through bankruptcy.
BurgerFi International’s parent company TREW Capital Management sold the 85-unit BurgerFi brand to rival Savvy Sliders for an undisclosed amount in December 2024 after the burger chain exited bankruptcy. TREW had purchased the fast-food chain owner out of bankruptcy with a $10 million credit bid in November 2024.
The Little Mint Inc., the parent company of the Hwy 55 Burger Shakes & Fries restaurant chain, finished 2024 by filing for Chapter 11 bankruptcy on Dec. 31, suffering from costs and labor shortages related to the Covid-19 pandemic, which coincided with its brand expansion.
The debtor operated 22 corporate-owned Hwy 55 locations and had 71 franchised locations in the Southeast. It closed 13 corporate-owned locations before it filed for Chapter 11 protection.
In a fast-food business shocker, supermarket chain Hy-Vee Inc. closed down all 79 Wahlburgers fast-food franchise locations in its stores in February 2025 with plans to replace them with its own Market Grille restaurants.
The cancelled agreement was a mutual one as Wahlburgers was not pleased with the performance of the Hy-Vee operated locations, according to Restaurant Business, as the burger chain’s CEO Randy Sharp said the locations had accounted for a small portion of the burger chain’s sales.
Wahlburgers wanted to focus more on its actual restaurants than the smaller in-store locations. The chain will have about 40 locations after the Hy-Vee units are closed.
Burger King franchisee Consolidated Burger Holdings files for Chapter 11 bankruptcy.
Image source: Naomi Baker/Getty Images
Burger King franchisee files for bankruptcy
Finally, huge Burger King franchisee Consolidated Burger Holdings LLC and two affiliates filed for Chapter 11 bankruptcy protection to reorganize their businesses.
The Destin, Fla.-based Burger King franchisee operates 75 restaurant locations in Florida and Georgia with over 1,500 employees, according to the company’s LinkedIn page.
More bankruptcies:
Popular restaurant and bar chain files for Chapter 11 bankruptcyPopular athletic shoe chain files for Chapter 11 bankruptcyAward-winning cosmetics brand files for Chapter 11 bankruptcy
The debtor filed its petition on April 14 in the U.S. Bankruptcy Court for the Northern District of Florida, listing $50 million to $100 million in assets and liabilities.
Consolidated Burger Holdings had been in a legal dispute with Burger King Co. over their franchise agreement beginning in 2019, but the parties finally reached a settlement in September 2024, according to court documents.
The Burger King franchisee did not state a specific reason for filing for bankruptcy in its petition.
Related: Another huge auto parts brand files for Chapter 11 bankruptcy
