Summit Restaurant Holdings, which operated over 145 Hardee’s restaurants, has filed for Chapter 11 bankruptcy protection.
The petition has been filed with the United States Bankruptcy Court for the District of Colorado.
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The company is part of Capstone Restaurant Group’s affiliate firms. The group manages more than 225 restaurants in 16 states including Hardee’s and Carl’s Jr.
Summit’s decision to file the bankruptcy is said to be due to decline in revenue and customer traffic, which added to rental obligations, debt, and other liabilities.
In its filing, the company also noted that the decision was also driven by the higher wages, labour costs, lower staff availability, shipping and food inflation as well as general inflation, QSR Magazine reported.
All the above factors are said to have caused cash flow issues for Summit.
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By GlobalDataSummit intends to enter an “asset purchase deal with a well-capitalised buyer”.
The buyer will be acquiring purchasing Summit’s remaining restaurants that are open and operating.
Prior to declaring bankruptcy, the company is said to have signed an asset purchase agreement with a stalking horse bidder, under which the purchaser agreed to buy all the assets.
The next steps include an auction with bidders. Summit seeks to conclude the deal by August this year.
Summit has become the latest quick-service franchisees to file declare bankruptcy this year. Earlier this year, Burger King operators TOMS King and Meridian Restaurants have also declared bankruptcy.
