The fast-food restaurant sector in the last year has suffered from an array of economic issues that have forced businesses to close locations.
Businesses have blamed the effects of the Covid-19 pandemic, rising costs from inflation, increased interest rates, and supply chain issues as the top reasons for financial distress. Fierce competition is another serious issue that causes businesses economic headaches.
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When it comes to fast-food hamburger chains, McDonald’s, Wendy’s, Burger King, and Sonic lead the pack of restaurants with huge advertising campaigns that rise above the competition.
Related: Bankrupt restaurant chain sells or closes its remaining locations
It’s a challenge for smaller chains to compete and stay in business. Those unable to meet the challenge will close restaurant locations, sometimes file for bankruptcy, and, in more desperate situations, close their businesses.
Among the fast-food chains that needed to shut down locations in 2024 was the parent company of the Hwy 55 Burger Shakes & Fries restaurant chain, which filed for Chapter 11 bankruptcy suffering from costs and labor shortages related to the Covid-19 pandemic, which coincided with its brand expansion.
Burger chains close restaurant locations
Hwy 55’s owner closed 13 corporate-owned locations before it filed for Chapter 11 protection to restructure its debt.Â
The Little Mint Inc., which operates 22 corporate-owned Hwy 55 locations and has 71 franchised locations in the Southeast, filed its petition on Dec. 31 in the U.S. Bankruptcy Court for the Eastern District of North Carolina.
Larger chain BurgerFi, which owned and franchised 144 burger and pizza restaurants nationwide, on Sept. 11 filed for Chapter 11 bankruptcy protection after a turnaround plan, implemented earlier in 2024, failed to produce the necessary results to prevent the filing.
The burger chain closed 19 underperforming corporate-owned locations and reduced related operating costs as part of its turnaround plan.
BurgerFi and the company’s Anthony’s Coal Fired Pizza, faced a drastic decline in post-pandemic consumer spending because of sustained inflation and increasing food and labor costs. Those forces required the company to stabilize the business in a structured process.
In some cases, franchise agreements terminate, leading to the closing of restaurant locations.
Wahlburgers closes 79 fast-food locationsÂ
That’s the case for supermarket chain Hy-Vee Inc. which closed down all 79 Wahlburgers fast-food franchise locations in its stores, which allows the Midwestern grocer to open its Market Grille restaurants in those markets.
Related: Bankrupt popular pizza chain operator unloads locations
Hy-Vee’s Market Grille will launch a new breakfast menu beginning Feb. 4 and will also roll out new lunch and dinner menus throughout February, the supermarket chain said in a statement.
More bankruptcy:
- Popular bankrupt restaurant chain unloads successful locations
- Formerly bankrupt burger chain rescued by fast-food rival
- Former bankrupt craft beer chain adds locations after closings
The breakfast menu features omelets, French toast, pancakes, and breakfast burritos and will be served from 6 a.m. to 11 a.m. on weekdays and 6 a.m. to 2 p.m. on weekendsÂ
The new lunch and dinner menus will bring back Hy-Vee Market Grille burgers, BLT, club sandwiches, pork tenderloin sandwiches, wings, and wontons. Lunch and dinner will be served from 11 a.m. to 8 p.m.
All Market Grille locations offer dine-in and carry-out service, as well as third-party delivery. When fully open, Hy-Vee will have 221 Market Grille and Market Grille Express locations across the Midwest.
The dissolved agreement seems to be a mutual one as Wahlburgers was not pleased with the performance of the Hy-Vee operated locations, according to Restaurant Business, as CEO Randy Sharp said the locations had accounted for a small portion of the burger chain’s sales.
Sharp said the company wanted to focus more on its actual restaurants than the smaller in-store locations. He said the chain will have about 40 locations after the Hy-Vee units are closed.
Hy-Vee in September 2018 reached an agreement with Wahlburgers to build, own, and operate 26 in-store burger franchises in seven Midwestern states, according to a statement at the time. Hy-Vee also said that its 84 Market Grille restaurants in stores would begin offering Wahlburgers-branded menu items.
That agreement eventually led to Hy-Vee operating 77 Wahlburgers locations.
Celebrity brothers Donnie, Mark, and Paul Wahlberg led the launch of Wahlburgers’ first restaurant in Hingham, Mass., in 2011.
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