A MASSIVE fast-food restaurant franchisee has filed for bankruptcy after reportedly accruing a whopping $14million in debt.
Meridian Restaurants Unlimited – a Utah-based company that operates 118 Burger King locations in nine states – is fighting a tough battle with poor sales and crippling inflationary costs, new court filings reveal.
The business owns and operates fast-food joints located in Utah, Montana, Wyoming, North Dakota, South Dakota, Minnesota, Kansas, Nebraska, and Arizona.
Burger King has not been able to keep up in a post-pandemic landscape, and reportedly brings in a relatively low $1.4million in sales per location.
This is about $500,000 less than rival Wendy’s and nearly half of what a McDonald’s location would sell on average.
Wages have also increased around $4.38 per hour in the past few years, which puts more pressure on business owners to keep up.
Meanwhile, food costs are up 22 percent.
Meridian submitted the filing and said these issues snowballed into a crushing amount of debt, Restaurant Business reports.
According to the filings, Meridian stated that the decrease in foot traffic due to the pandemic meant the fast-food joints had a “greater sensitivity to the recent, dramatic rise in labor, commodity and maintenance costs.”
Some of their restaurants have even been seeing losses for “many years,” records show.
However, the business said there’s hope for the future and believes that financial restructuring and recent changes made by Burger King will get them out of this slump.
It comes after Burger King executives have voiced concerns with the company and announced their multi-year plan to “reclaim the flame,” Restaurant Brands International reports.
“I think that where we have the most opportunity is really redefining or defining who we are – having a relevant and distinct voice,” said Chief Operating Officer Tom Curtis in a call with RBI.
“We’re excited to work on that brand positioning and defining our brand essence going forward.
“I think we’ll be focusing on our core, on the Whopper, flame grilling, ‘Having it Your Way.’
“Those are really the things that made us great and the things that will make us great going forward.”
The King has introduced the “Royal Reset” plan, which includes two important components.
The first part will invest $50million over the next two years to renovate and freshen up nearly 3,000 restaurants.
The modernization consists of new restaurant technology, kitchen equipment, and building enhancements.
The investment is to promote an exceptional guest experience while working hand in hand with the “Fuel the Flame” advertising plan.
The remaining $200million will go toward restaurant remodel projects for about 800 stores in the next two years.
Moving forward, the company will present a more streamlined menu and eating experience which will simplify the entire process for both employees and customers.
Executives also suggested that digital innovation could come soon to make online ordering an easier option.
“These measures and the renewed focus on operations are welcomed by franchisees and starting to drive progress in several key operational metrics, including order accuracy and overall satisfaction,” Curtis said.
The company finished 2021 with 19,247 stores, which was an overall growth of 622 restaurants