Fast food chains and their franchisees have struggled over the last few years. The COVID-19 pandemic disrupted many restaurants and their operations. Now, eateries have been unable to bring in the profits they’re looking for in 2024, thanks to factors such as high inflation.
Recently, another fast food franchisee filed for Chapter 11 bankruptcy, signaling that this bankruptcy trend isn’t about to end anytime soon.
EYM Pizza Files for Bankruptcy
In July, EYM Pizza filed for Chapter 11 bankruptcy protection. EYM Group is a huge franchisee company that operates a variety of fast food establishments in 7 states. EYM runs Panera Bread, Burger King, Pizza Hut, KFC, and Denny’s franchises.
EYM Group has different subsidiaries for its various businesses and franchises. For example, EYM King is the group’s Burger King subsidiary.
While different parts of the company have clearly faced business difficulties in recent years, EYM Pizza is the latest to file for bankruptcy. This bankruptcy filing comes after EYM shut down multiple Pizza Hut locations in various midwestern states.
This bankruptcy may impact other parts of the group in the future. So far, EYM Group has closed dozens of its KFC locations, slashing the number of fast food eateries it operates in half.
EYM Group hasn’t commented on this bankruptcy filing, nor on the many closures its subsidiaries have conducted.
This bankruptcy filing also comes amid the company’s ongoing lawsuit with Yum Brands. EYM has claimed that Yum Brands’ inability to invest in modern technology has harmed its franchisee owners.
Meanwhile, Armada Oil and Gas is suing EYM King for breaking a lease and failing to pay rent on its shuttered Burger King locations.
Fast Food Chains Face Bankruptcy
EYM Group’s bankruptcy filing marks the latest fast food franchisee that has struggled amid the changing landscape in 2024. While some fast food eateries were hurt during the pandemic, many were able to bounce back quickly, especially as Americans continued to eat out with the influx of cash many had at the time.
Now, however, American consumers have changed how they spend money. Many are not going out to fast food locations as much as they once did. High inflation has even caused many consumers to feel that fast food is incredibly expensive now — and even a luxury they can no longer afford.
This mentality has seen customer traffic in various fast-food chains drop dramatically. Many chains, such as McDonald’s, have tried to bring customers back in by offering more affordable meals.
However, high inflation remains a growing problem within the fast food industry. The rising cost of labor and food may also continue to harm fast-food restaurants trying to bring in profits.
Franchise owners, such as groups like EYM, have faced the most difficulties in recent years because of these many factors. As a result, many analysts believe that more Chapter 11 bankruptcy protection filings may be seen in the near future, especially if high inflation remains such a pressing issue.
