The fast-food restaurant sector has faced economic challenges in the first half of 2025 after experiencing the consequences of financial distress in 2024.
Restaurant operators with significant debt obligations endured increased loan payments as interest rates continued to rise since March 2022.
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Higher interest rates were not the only problem, as inflation began rising as well after the Covid-19 pandemic subsided in 2020, and industry competition put additional pressure on dining establishments.
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The parent company of the Hwy 55 Burger Shakes & Fries chain, The Little Mint Inc., finished last year on a sour note, as it filed for Chapter 11 bankruptcy on Dec. 31, 2024, suffering from higher costs and labor shortages related to the Covid-19 pandemic, which coincided with its brand expansion.
The Little Mint operated 22 corporate-owned Hwy 55 locations and had 71 franchised restaurant locations in the Southeast. It closed 13 corporate-owned locations before it filed for bankruptcy protection.
Supermarket chain Hy-Vee Inc., which operated 79 Wahlburgers fast-food franchise locations in its stores, closed all of its units in February 2025 with plans to replace them with its own Market Grille restaurants.
The grocery chain did not file for bankruptcy.
The cancelled agreement was mutual, as Wahlburgers was not pleased with the performance of the Hy-Vee-operated locations, and the in-store Wahlburgers had accounted for a small portion of the burger chain’s sales, the company’s CEO said.
Burger King franchisee filed for bankruptcy
Burger King franchisee Consolidated Burger Holdings LLC and two affiliates, which operated 57 restaurant locations in Florida and Georgia, filed for Chapter 11 bankruptcy protection to reorganize their businesses in April 2025.
The Destin, Fla.-based Burger King franchisee at one time had 75 locations and 1,500 employees, according to the company’s LinkedIn page.
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The nation’s largest fast-food chain Subway, which completed its sale to private equity firm Roark on April 30, 2024, for reportedly $9.6 billion, had a nine-year run of declining store counts from 2016-2024 for a net decline of 7,616 stores.
The popular sandwich chain ended 2024 with 19,502 restaurants in the U.S., while its website says that it has nearly 37,000 locations in over 100 countries.
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The dining chain recorded a net decline of 631 stores in 2024, according to data from Statista.
Subway’s U.S. store count had peaked in 2015 with about 27,118 locations.
The fast-food chain’s U.S. store count decline in 2024 was the company’s largest drop in locations since 2021, when it had a net decline of 1,043.
Subway franchisee files for bankruptcy
And now, a Subway franchisee operating in California has filed for Chapter 11 bankruptcy protection to reorganize and likely remain in business.
The debtor did not reveal a reason for filing for bankruptcy in its petition.
Montebello, Calif.-based franchisee CGA Corporation filed its Subchapter V petition on June 25 in the U.S. Bankruptcy Court for the Central District of California, listing $50,000 to $100,000 in assets and $100,000 to $500,000 in liabilities in its petition.
The debtor’s largest creditor listed in its petition is the Small Business Administration, with a claim of a partially secured loan of $249,000. Other creditors listed in the petition include Can Capital, Forward Financing, and OnDeck.
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