2 Struggling Restaurant Chains Are the Latest to Declare Bankruptcy in 2023
A growing number of restaurant chain bankruptcies are shaking the industry in 2023—and the list of affected brands just got a little longer.
Back Yard Burgers and Wild Wing Cafe filed for Chapter 11 bankruptcy protection in June and July, respectively. Both of the chains are owned by the North Carolina-based private equity firm Axum Capital Partners, which attributed their struggles to the COVID-19 pandemic and other factors.
"The ongoing devastating impacts of COVID-19 and the changing market dynamics within the restaurant industry have contributed to continued struggles for both chains. We believe the strongest futures for both chains will happen through court restructurings," a company spokesperson said in a statement on the bankruptcy filings.
"Over the last several months, the chains have enacted steps to right-size the businesses, streamline, and begin to restructure the companies and position them both for long-term success. These actions are already beginning to yield positive results, and we expect those trends to continue," the statement added.
This is the second bankruptcy filing in a little more than a decade for Back Yard Burgers, which struggled during the Great Recession and previously sought Chapter 11 protections in 2012, Restaurant Business Magazine reported.
While the Nashville-based fast-casual burger brand was once at the forefront of the higher-end burger trend, it didn't keep pace with the explosion of popular rivals like Shake Shack and Five Guys. Back Yard Burgers currently operates 20 locations, a drastic drop from the roughly 180 restaurants it had back in the early 2000s. The chain has already reportedly closed a handful of locations in 2023, including in the Jackson, Miss., and Charlotte, N.C., areas.
Things haven't been much better for Wild Wing Cafe, a casual dining brand known for its wings, beer, and entertainment-themed atmosphere. In addition to the COVID-19 struggles, the chain had to file for Chapter 11 protections because it wasn't able to restructure a whopping $12.5 million in debt. Like Back Yard Burgers, the chain has reportedly closed several locations this year and is down to 24 restaurants.
With the Chapter 11 filings, Back Yard Burgers and Wild Wing Cafe join a growing list of restaurant chain bankruptcies in 2023. Two major Burger King franchisees have declared bankruptcy since the start of the year. One of them, Meridian Restaurants Unlimited, revealed in court filings in April that it would close 27 restaurants and potentially even more in the future.