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McDonald’s franchisee, Rice Enterprises, which owns at least eight branches of the fast-food restaurant, has filed for Chapter 11 bankruptcy protection. The company has been operating in Pittsburgh for a long time and now it is declaring insolvency.
According to Restaurant Business, Rice Enterprises’ filing comes less than two years after it was sued for the alleged rape of one of its staff, who was only 14 years old at that time. The manager of one of its McDonald’s locations was pointed out as the culprit of the crime.
It was reported that the company’s bankruptcy filing last week adds to the woes which the company is facing right now. Apparently, amid its legal issues related to the rape charges of one of its former managers, it is also going through a financial crisis that has led to the Chapter 11 filing.
Rice Enterprises has been operating McDonald’s outlets in the Pittsburg area since 1987, and it has listed assets worth between $10 million and $50 million but just $1 million to $10 million in liabilities. Based on the reports, it has a total of 435 employees and does not list a secured creditor.
It also listed McDonald’s as its unsecured creditor over a $1 million indemnification claim which the company is disputing. In any case, the franchisee is planning to use the bankruptcy process as a way to protect its assets and a chance to restructure its debt. Moreover, it has filed for bankruptcy to keep its franchise agreements as well.
Meanwhile, in 2021, Rice Enterprises owner, Michele Rice, said that her company does not tolerate sexual harassment in the workplace. But still, she was sued for hiring a registered sex offender.
“The allegations made in the lawsuit are deeply disturbing – my organization has no tolerance for sexual harassment, and we terminated the employee in question as soon as we learned about a complaint against him,” she said at that time. “While all of our employees undergo safe and respectful workplace training upon hire, we have recently expanded our training to be bi-annual, in addition to adding enhanced security measures at our restaurants.”
Photo by: Nicolás Varela/Unsplash
