BurgerFi, the fast-casual burger chain and owner of Anthony’s Coal Fired Pizza, is currently facing financial difficulties and may need to file for bankruptcy. As of August 14, the company only had $4.4 million on hand and expects to report a loss of $18.4 million for the quarter ending July 1. This financial situation reflects the challenges faced by many fast-casual chains in recent months, as diners opt to eat at home or seek better value options when dining out. Chains like McDonald’s, Starbucks, Burger King, and Wendy’s have all reported lower foot traffic and sales, prompting them to offer value meal options to attract customers. Other chains, such as Mod Pizza and Red Lobster, are also struggling to avoid bankruptcy.
According to an SEC filing, BurgerFi stated that if it does not receive relief from its senior lender or other sources of cash, it may need to seek protection under bankruptcy laws. The company’s senior lender can declare the debt due and payable at any time, potentially leading to a foreclosure and seizure of BurgerFi’s assets if it cannot repay the debt. This situation raises concerns about BurgerFi’s ability to continue operating its 60 pizza stores and 102 burger restaurants.
Store closures and rising food prices have been cited as the main reasons for BurgerFi’s decline in sales. The company also noted that an increase in chicken wing prices and higher wages have contributed to its operating expenses. BurgerFi initially raised concerns about its financial stability in May, announcing a review of strategic alternatives due to liquidity challenges. They have since been exploring options such as obtaining additional financing, selling assets or the entire company, and prioritizing certain obligations to address their financial difficulties. Despite receiving $2.5 million in emergency funding from a lender on August 9, there is uncertainty about whether these measures will be sufficient to pay off all debts.
BurgerFi went public in 2020, but its stock has plummeted nearly 60% year to date, trading at just 33 cents on Monday. The company’s stock decline reflects investor concerns about its financial stability and the potential need for bankruptcy protection. With limited cash reserves and mounting losses, BurgerFi is facing a critical situation that may require drastic measures to address its financial challenges. The company’s future remains uncertain as it grapples with the looming possibility of bankruptcy and the need to secure additional funding to stay afloat.CNN has reached out to BurgerFi for comment on their financial situation, but there has been no response from the company regarding their current circumstances.
