The restaurant industry has been under a lot of pressure this year, and it seems like it’s finally starting to boil over.
We’re seeing lots of bankruptcies. Layoffs. Closures.
The latest victim? Burger King.
More specifically, one of Burger King’s franchisees, Consolidated Burger Holdings, closed 18 stores (and, of course, likely had to let just about everyone at those stores go) in a desperate attempt to maintain viability before finally succumbing to bankruptcy in mid-April.
It gets worse
In case you were thinking “so they closed 18 restaurants and then fell into bankruptcy, how could that possibly get worse?” – the answer is that it definitely can.
You see, Consolidated Burger Holdings (CBH) still operates 57 Burger Kings across Florida and Georgia, and many of them are likely on the chopping block as well.
So the layoffs we’ve seen, unfortunately, could just be a sign of things to come.
CBH is currently going through a court-managed sales process to try and sell the remainder of its portfolio as part of the bankruptcy – but so far, there haven’t been any reported buyers.
Not great signs.
Industry headwinds
We’re seeing lots of chains shutting down stores as they try to find some way to survive a trifecta of difficult headwinds that are all hitting more or less simultaneously:
- Of course, there’s food inflation – beef, eggs, coffee, feels like “you name it, it’s more expensive.” That’s impacting restaurant margins as they try to figure out how to pass on costs to customers without facing a revolt.
- Plus some real shifts in demand – Gen Z wants healthier food, chain restaurants in general are just getting less wallet share (and that goes double for greasy chains like Burger King), and of course we’ve seen a huge shift toward takeout with delivery apps like DoorDash and Uber. That is, of course, also impacting restaurant margins.
- And finally, there’s the current economic malaise which is just putting the squeeze on everyone. When people start getting worried and tighten up spending, restaurants are one of the areas that tend to get cut.
If you’re Burger King, you’re facing all of the above and more.
Plus, let’s face it, the US economy really only recently fully recovered from the 2020 shocks and the big inflation push we saw in 2022. There’s a lot that’s still very fragile, and restaurants (especially chain restaurants) haven’t caught a break in a long time.
Here’s hoping everyone gets some breathing room soon.
Especially…
The real victims
The people who’ve suffered most in all of this – in my opinion – are the workers.
They showed up every day and did a great job – and then lost their jobs through no fault of their own.
And of course – we all understand that CBH is in dire straits – but it still stinks for these folks who did their work, did it well, and still have to find a new job.
I hope the next chapter is kinder and ends better than this last one.
Readers – if you have any food service job leads in Florida and Georgia, or advice or encouragement for these folks – please leave a comment and share!
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