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IPFS News Link • Business/ Commerce

A BIG BURGER KING FRANCHISEE DECLARES BANKRUPTCY

• By Jonathan Maze

TOMS King Holdings, a 90-unit Burger King operator with locations in four states, declared bankruptcy this week, blaming the pandemic and subsequent inflation challenges for draining its cash flow and making it unable to pay its debt.

The company is one of the burger chain's largest franchisees and operates locations in Illinois, Ohio, Pennsylvania and Virginia. It filed for Chapter 11 bankruptcy protection with $35.5 million in secured debt and another $14 million in unsecured obligations, according to court documents. TOMS plans to sell its restaurants through the bankruptcy process.

TOMS in court filings said that its business "suffered significantly from [a] loss of foot traffic, resulting in declining revenue without proportionate decreases in rental obligations, debt service and other liabilities."

The company then noted that higher costs for shipping and food, a lack of labor and overall inflation exacerbated its problems with cash flow. While some of TOMS' restaurants are profitable, the company said, others are losing money, making it unable to make its debt payments.

TOMS started working with its lenders and its franchisor to restructure last year. The company hired a restructuring advisor that ultimately recommended filing for bankruptcy. The company appointed RJ Dourney, the former CEO of the bakery-café chain Cosi, to be an independent manager of the business. It also appointed Daniel Dooley, CEO of the consulting firm MorrisAnderson, to be its chief restructuring officer.


thelibertyadvisor.com/declare