Fast food chain with once 1,200 restaurants is about to close – the remaining 27

Fast food chain with once 1,200 restaurants is about to close – the remaining 27

Numerous restaurant chains have closed or filed for bankruptcy due to financial problems, including Red Lobster, Pizza Hut, Buca di Beppo, TGI Fridays, Popeyes, Tijuana Flats, Cracker Barrel and Applebee’s. But few have seen profits fall as sharply as Boston Market. At its peak, the popular fast-food chain had 1,200 restaurants, but now it has only 27, and its days are numbered.

Four years ago, Engage Brands, LLC, owned by Jignesh Pandyaacquired Boston Market and has run into trouble. In December, Pandya personally filed for bankruptcy, claiming liabilities of $10 million to $50 million, in part because of judgments against him, including one against another company he owns, Yum Brands, which faces an $11 million penalty over litigation with Pizza Hut stores.

Normally, this wouldn’t affect another company it owns, like Engage Brands, but unfortunately that company is also embroiled in some serious litigation, including one that ended with the court ordering the company to pay $15 million to one of its suppliers, US Foods. Hundreds of others have also sued Boston Market and Engage Brands for unpaid balances. Another ruling required the brand’s bank to turn over all the money in its accounts to US Foods, but since so many other companies have made claims to the funds, the bank can’t do that, according to Restaurant Business.

Pandya tried to file for Chapter 11 bankruptcy for Engage, but a court denied his petition and in April barred him from filing again until October. The company’s headquarters has since been seized for unpaid taxes. While there are fewer than 27 restaurants left, the store locator on the chain’s website is outdated and lists locations that have been permanently closed. In fact, the only reason the remaining Boston Markets that are still open are able to continue operating at all is because of the complex litigation surrounding the company.

To say things are looking bleak for Boston Market would be an understatement. Given this level of debt, assuming all forms are properly filed in October, it is likely that it will file for Chapter 7 bankruptcy, which would result in the immediate closure of all remaining stores.

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