BurgerFi is in big trouble and may go out of business
New York
CNN
—
BurgerFi, the fast-casual burger chain and owner of Anthony's Coal Fired Pizza, is running out of cash, and options. The company said it may need to file for bankruptcy.
The company said it had just $4.4 million on hand as of August 14. It also expects to report a loss of $18.4 million for the quarter ending July 1. In the same quarter in 2023, the chain reported a loss of only $6 million.
BurgerFi's dire financial situation underscores the difficulty some fast casual chains have had in recent months, as diners grow fed up with high prices and choose to eat at home or seek better value when they dine out. McDonald's, Starbucks, Burger King and Wendy's have all reported less foot traffic and lower overall sales and have jumped into value meals to attract customers. Meanwhile, chains like Mod Pizza are also attempting to stave off bankruptcy, and Red Lobster recently went bankrupt.
The company said that in an SEC filing that if it "does not receive adequate relief from its senior lender" or other cash from outside providers or selling off its assets, it "may seek protection under applicable bankruptcy laws."
As part of its credit agreement, the company's senior lender can declare the debt due and payable immediately at any time. If that time is now, BurgerFi wouldn't be able to pay it off, meaning the lender could forclose and take possession of BurgerFi's assets, the company said.
BurgerFi is the parent company of its namesake and Anthony's Coal Fired Pizza. Because of the lack of cash, BurgerFi is uncertain if it can continue to operate its 60 pizza stores and 102 burger restaurants.
CNN has reached out to BurgerFi for comment.
The company said that store closures were the primary cause of its decline in sales. Food prices have also hurt BurgerFi, the company cited a price increase in chicken wings and higher wages for its increase in operating expenses.
BurgerFi first rang the alarm in May, when it announced it was going over "strategic alternatives" due to its liquidity challenges. Since then, it's been trying to find additional financing, sell off assets or the entire company, and "reviewing and prioritizing certain obligations over others," according to the SEC filing.
On August 9, the company agreed to receive $2.5 million in emergency funding from a lender.
There's still no assurance that these steps will be enough to pay off all of its debts, however, the company said.
BurgerFi (BFI) went public in 2020, and its stock has dropped almost 60% year to date. The stock was down 9% and trading for just 33 cents Monday.
