Moe’s Southwest Grill customers in three states could soon have fewer locations to choose from after one of the chain’s largest franchisees filed for bankruptcy. The operator is seeking to close 16 restaurants as it works to restructure its business.
Franchisee files for Chapter 11
Quality Fresca, a Palm Beach, Florida-based Moe’s franchisee, filed for Chapter 11 bankruptcy protection on August 4 in the U.S. Bankruptcy Court for the Southern District of Florida. At the time of the filing, the company operated 38 Moe’s restaurants across Florida, South Carolina, Virginia, and Washington, D.C.
The company is seeking to reject the leases for 16 restaurants, including 14 locations in Florida, one in Virginia, and one in Georgia. If all 16 closures move forward, Quality Fresca would be left operating approximately 22 restaurants.
Several of the affected restaurants have already closed, according to Fast Company, while at least 10 locations were listed as permanently closed on Google at the time of its reporting.
Rising costs and declining sales cited
Quality Fresca attributed its financial problems to industry headwinds, increased costs, and declining revenue. Court filings also cited reduced customer traffic, higher food and shipping costs, and difficulties with labor availability as factors that weakened the company’s cash flow.
The franchisee previously operated substantially more Moe’s restaurants. Quality Fresca acquired 67 locations in 2020 and added two more in 2021, bringing its portfolio to 69 restaurants. It subsequently closed dozens of underperforming locations before entering bankruptcy with 38 restaurants.
Moe’s parent company is not bankrupt
The bankruptcy filing involves Quality Fresca, not Moe’s Southwest Grill or its parent company, GoTo Foods. The parent company continues operating the Moe’s brand, which had roughly 541 U.S. locations according to its store locator at the time of Fast Company’s reporting.
Quality Fresca says it intends to either reorganize around viable restaurants or pursue a sale while continuing operations during the Chapter 11 process.
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