One of Burger King’s biggest franchisees, Meridian Restaurants walked away from a total of 120 Burger King locations. The major player filed for bankruptcy, and filed a motion in court to close the last of it’s 21 remaining stores.
Meridian Restaurants Unlimited filed for bankruptcy back in March. At the time, the franchisee had 120 Burger King Locations on it’s roster but was $14 million in debt. The company listed post-COVID related issues including; inflation, decreased traffic, increased operational costs, and wages as reason for their failure to recover.
On September 19th, Meridian had already sold 70 locations at a discount to other franchisee companies:
- 32 were bought by Burger King for $4.7 million
- Franchisee Kansas King bought 16 for $2.2 million
- Dakota Restaurant Partners bought 12 locations for $3.4 million
- Kraft bought 7 locations for $7 million
- Snake River Foods bought 3 locations for $632,250
By the time an auction was held on September 19th, bids were too low to warrant the purchase of the remaining 21 locations so Meridian requested to have them closed, filing a motion in court.
During the spring, CEO Joshua Kobza warned that there would be over 400 locations closing by 2024. Every month comes another announcement that more Burger King’s are closing. By March 2023 alone, 123 locations had been shuttered.
Indeed, many closures have hit the deck since the CEO announced the news on an earnings call. Kobza noted that the brand wanted to only work with “high-quality operators” who were on board with “implementing the changes necessary” to re-new the struggling chain.
What that means exactly, is anyone’s guess as “under-performance” or bankruptcy due to issues outside of any franchisees control… appear to be accounting for the chains failure to profit.
Burger King’s $400 million plan to re-invigorate it’s image with new marketing campaigns and technology seems to be a gamble at this point. After all, you’d probably be hard-pressed to hear Meridian Restaurant Unlimited sing…”You Rule.”
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