Until recently, the future of 90 Burger King restaurants located throughout the Midwest and South looked uncertain. The struggling franchisee that operates them, Toms King Holdings, filed for bankruptcy in January this year after seeing significant drops in foot traffic and revenue.
But most of those 90 restaurants are now set to be saved since not one, but four buyers have offered to purchase a total of 82 locations, Restaurant Business Magazine reported. The bankruptcy court has yet to approve the sale, but if it does, the vast majority of the restaurants will be able to continue serving guests under their new owners.
The remaining eight, some of which have already been shuttered since the bankruptcy filing, were left out of the deal. Toms King Holdings was contacted for more information on what lies ahead for all of the restaurants that weren't purchased out of bankruptcy but did not immediately respond.
The franchisee's restaurants are located throughout Illinois, Virginia, Ohio, North Carolina, and Pennsylvania. The company DC Burger has agreed to buy the largest number of the locations, 37, all of which are located in Virginia. Karali Group, another franchisee that operates Burger King locations in the United Kingdom, wants to purchase 27 restaurants. Most of these 27 locations are located in Ohio, though two are located in Pittsburgh.
Franchisor Burger King is also acquiring 17 of the restaurants, most of which are in Illinois and Dayton, Ohio, Restaurant Business Magazine reported. Court documents show that the fourth and final buyer, Restaurant Concepts, wants to buy just one restaurant in Pittsburgh.
Altogether, the buyers have agreed to pay $33 million to acquire the 82 restaurants, slightly less than the $35.5 million in secured debt that Toms King Holdings had when it filed for bankruptcy protections.
While the franchisee's bankruptcy case appears close to being resolved, Toms King is not the only Burger King operator that found itself in financial trouble this year. Major franchisee Meridian Restaurants Unlimited, which operates around 120 Burger King restaurants, also filed for bankruptcy in March due to decreases in foot traffic and revenue. Another franchisee filed a notice just last week that it will close 26 restaurants in Michigan after Burger King sued it for allegedly failing to pay required royalties, ad fund payments, and other charges.
All of these bankruptcy filings and store closures have been unfolding as Burger King works to improve its profitability and image with a $400 million investment campaign after seeing lagging sales in recent years and being unseated by Wendy's as the second-largest burger chain in America. In the fourth quarter of 2022, things began to look up for the chain as it saw promising increases in same-store sales and guest satisfaction.