BurgerFi Struggles Financially and May Face Bankruptcy

BurgerFi, the fast-casual burger chain known for its namesake restaurants and Anthony’s Coal Fired Pizza, is grappling with severe financial difficulties and may be on the brink of bankruptcy. The company disclosed that it has only $4.4 million in cash as of August 14 and anticipates reporting a quarterly loss of $18.4 million for the period ending July 1. This is a significant increase from the $6 million loss reported in the same quarter last year.

The chain’s financial woes highlight broader challenges facing the fast-casual dining sector, where rising food costs and shifting consumer habits are putting pressure on many establishments. Major chains like McDonald’s, Starbucks, Burger King, and Wendy’s have reported reduced foot traffic and are now offering value meals to attract customers. Similarly, other dining chains such as Mod Pizza and Red Lobster have also faced significant financial troubles, with Red Lobster recently filing for bankruptcy.

In an SEC filing, BurgerFi warned that without sufficient relief from its senior lender or additional funds from external sources or asset sales, the company might seek protection under bankruptcy laws. The company’s senior lender has the authority to demand immediate repayment of debt, which could lead to foreclosure and asset seizure if BurgerFi cannot meet its obligations.

BurgerFi operates 60 Anthony’s Coal Fired Pizza locations and 102 BurgerFi restaurants. The company has cited store closures and rising food prices, particularly for chicken wings, as key factors contributing to its financial strain. Additionally, increased wages have added to its operating expenses.

In response to its liquidity challenges, BurgerFi began exploring “strategic alternatives” in May, including seeking additional financing, asset sales, and prioritizing financial obligations. On August 9, the company secured $2.5 million in emergency funding from a lender, but it remains uncertain whether this will be sufficient to resolve its financial issues.

Since going public in 2020, BurgerFi’s stock has dropped nearly 60% year-to-date, with shares trading at just 33 cents on Monday, marking a 9% decline. CNN has reached out to BurgerFi for further comment on its situation.