California / Nevada Fatburger Franchisees File Bankruptcy

CoStar Group:

Two of the largest Fatburger restaurant franchisees, Fatburger Restaurants of California and Fatburger Restaurants of Nevada, filed Chapter 11 bankruptcy on Apr. 7, 2009. The companies operate a total of 32 restaurants in the two states; but according to Fatburger’s corporate website, there are 36 restaurants in California and 14 in Nevada.
fatburger

These two franchisees employ about 490 people and brought in 2008 sales of $26 million, accounting for 72% of the parent company’s revenues, according to the Wall Street Journal. Reportedly, the franchisees have experienced declining sales for the last three years and were unable to obtain adequate financing to prevent bankruptcy.

The franchisee’s bankruptcy plan is to restructure or reject unfavorable leases in an effort to only leave profitable locations in operation. According to CoStar Tenant, Fatburger’s California and Nevada restaurants average 1,750 square feet each and range in size from 500 to 5,750 square feet.

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