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Burger King has another franchisee that was forced to file for bankruptcy protection. Premier Kings of North Alabama, LLC owns 172 units of BK stores, and due to increasing losses and very low sales, it filed for Chapter 11.
This is the third major Burger King operator to file for bankruptcy this year. Premier Kings is one of the largest franchisees of Burger King Corp. and it runs its restaurants in five states in the Southeast region which are South Carolina, Georgia, Tennessee, Florida, and Alabama.
Main Cause of the Bankruptcy Filing
It was reported that the franchisee and affiliates filed for Chapter 11 bankruptcy protection last month at a U.S. Bankruptcy Court in the Northern District of Alabama. This comes more than a year after its owner and manager, Manraj “Patrick” Sidhu, suddenly died in May 2022, as per Nation’s Restaurant News.
With the untimely passing of Sidhu, his company also placed its Popeyes restaurants into bankruptcy earlier this year. The reason was the same - slow sales and losses are piling up.
For its Burger King stores, Premier Kings attempted to stop incurring more losses by putting some of its locations up for sale. It tapped Raymond James & Associates Inc., a capital market company, to handle the sale.
However, the cost-cutting move did not work and rather, its bills from lenders, landlords, and vendors continued to grow. Thus, it was left with no choice but to seek bankruptcy protection.
Reclaim the Flame Plan
QSR Magazine reported that the restaurant company firm joined fellow Burger King franchisees TOMS King and Meridian Restaurants Unlimited in the list of units that have declared bankruptcy this year alone. This happened amid the BK chain’s “Reclaim the Flame” turnaround plan as sales are declining.
Burger King invested $400 million in this campaign but the number of its stores continues to dwindle. Now its parent company, Restaurant Brands International is planning to finalize its reduction for underperforming units in the last quarter of 2023 and start the upcoming new year with a stronger brand portfolio.
Photo by: Aashish Singh/Unsplash
