Fast-food burger chain Jack in the Box just posted its highest sales in almost three decades, but not all of their locations are doing so hot. Missouri Jack, a franchisee that operates 70 locations of the beloved chain in Missouri and Illinois, has just filed for bankruptcy on account of its debt.
Missouri Jack and Illinois Jack, which own Jack in the Box restaurants in their respective states, filed for Chapter 11 bankruptcy after the owner was unable to reach an agreement with City National Bank (CNB) over a debt of more than $15 million, according to Restaurant Business. (Related: McDonald's Is Making These 8 Major Upgrades.)
Based on the court documents, the franchisee cited growing competition in the fast-food business as well as the COVID-19 pandemic as the main reasons for falling behind on its loan payments to CNB. While the company has been negotiating a workout with Jack in the Box and CNB for nearly a year, it was unable to strike a deal.
The filing could affect 57 Jack in the Box locations in Missouri and 13 locations in Illinois, but closures may not necessarily follow. The filing says major creditors have tentatively agreed to mediation while the franchisee is under bankruptcy court protection.
While Missouri and Illinois may see some Jack in the Box closures, the company has announced their franchisees would actually be expanding locations for the first time in a decade, as the brand's earnings statement reveals the strongest sales since 1994.
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