Welcome to the 132nd Pari Passu Newsletter. 

Earlier this year, we covered the case of Red Lobster and learned how complex elements fit together in its bankruptcy. Today, we are looking at another restaurant bankruptcy, BurgerFi.

We will see how shifting consumer tastes from premium goods to value deals, combined with high operating expenses, led to the company’s inability to service its debt. Through the case of BurgerFi, we will also learn about restaurant-specific operating metrics and understand how they contribute to restaurants’ profitability.  

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BurgerFi Overview 

Founded in 2011, BurgerFi International, LLC (“BurgerFi”) started as a fast-casual restaurant chain known for its “better burger” concept, focus on quality, all-natural ingredients, and classic American menu items such as premium burgers and hand-cut fries [1]. BurgerFi’s commitment to its premium positioning in the fast-casual industry was deeply ingrained in its operations; the company’s sole stated purpose was a definition of the invented term “BurgerFication:”

BurgerFi’s patties are made from never-frozen, 100% natural Angus beef free from additives, placing the company’s patties into the top ~1% of US beef. The company catered toward customers who valued sustainability and environmental initiatives through its VegeFi burgers (100% plant-based), free-range chicken, and use of locally sourced ingredients. All of these factors allowed the company to attract a loyal customer base and differentiate itself from other fast-food competitors [2]. BurgerFi’s popularity is reflected in its numerous awards and recognitions from online food reviews and restaurant industry outlets; the company boasts titles such as SOBE Wine and Food Festival’s “The Very Best Burger” in 2023, USA Today’s “Best Fast Food Burger” in 2023, and Fast Casual’s #1 Brand of the Year in 2023 [1]. 

Building on its brand strength and growth in the fast-casual industry, BurgerFi acquired Anthony’s Coal Fired Pizza & Wings (“Anthony’s”), a premium pizza and wings chain that has also amassed many awards in the fast-casual industry, in November 2021 [1]. To keep things clear, we will refer to BurgerFi International (the consolidated company) as “BurgerFi” and the individual brand of BurgerFi as “BurgerFi Brand.” 

As of September 2024, the company operates 93 BurgerFi brand restaurants (17 corporate-owned and 76 franchised locations) and 51 Anthony’s restaurants (50 corporate-owned and 1 dual-brand franchised location) across the US, Puerto Rico, and Saudi Arabia [1]. 

Corporate History

From 2013 – 2015, BurgerFi underwent rapid growth and expanded by 25 – 30 locations per year, becoming one of the fastest growing brands in the better burger segment. As the fast food landscape became more competitive, BurgerFi pivoted from expanding to strengthening its infrastructure and operations to become more scalable. Specifically, the company added a centralized call center to streamline phone orders and second make-lines in kitchens (duplicate prep stations specifically dedicated to handling orders not made in-store) to handle takeout and delivery orders [3]. 

Both of these developments helped the company become more scalable. In 2018, BurgerFi was back in growth mode with 40% of the company’s systemwide sales (combined sales from both corporate-owned and franchised locations) attributable to takeouts. It is important to distinguish between BurgerFi’s systemwide sales and its revenue: systemwide sales reflect total sales across all franchised, corporate-owned, and ghost kitchen locations, while revenue represents only the portion of those sales that BurgerFi actually earns [6]. As such, systemwide sales reflects a more comprehensive picture of overall consumer traffic, while revenue reflects financial gains. With stronger infrastructure now in place, BurgerFi began establishing partnerships with major delivery services such as DoorDash and Uber Eats [4]. 

In January 2020, Nation’s Restaurant News named BurgerFi’s president, Charlie Guzzett, the second most influential restaurant executive in the US. By June 2020, BurgerFi had expanded to 125 locations and launched its first ghost kitchen with REEF Technology (a network of delivery-only kitchens), achieving the highest opening sales for a new brand in that type of REEF location. BurgerFi’s REEF ghost kitchens were opened to expand delivery reach and capitalize on the pandemic-influenced shift toward off-premise dining. Sales under these ghost kitchens fell under the digital channel sales portion of BurgerFi’s systemwide sales, which we will cover in detail later on in the Business Model section. The company had planned to launch 15 new locations by 2021 [3]. 

It was evident that BurgerFi was growing rapidly, and special purpose acquisition company (SPAC) OPES Acquisition Corp saw this as an opportunity to capitalize on the company’s upward trajectory in June 2020. A special purpose acquisition company is a shell company that raises money through an IPO to acquire or merge with a private company, which it then takes public with a traditional IPO. SPAC IPOs are typically faster and reduce some regulatory burdens for the private company. For example, let’s say Company A is a private business that wants to go public. Instead of going through the traditional IPO route, it merges with a SPAC called XYZ Acquisitions, which has already raised money from investors through its own IPO. After the merger, Company A goes public using XYZ Acquisitions Corp.’s listing, and XYZ Acquisition’s shareholders now own a piece of Company A. Similar to our example, BurgerFi was acquired by OPES Acquisition Corp in December 2020 for a $100mm purchase price in the form of $30mm in cash and 6.6mm newly issued shares [2]. By the end of 2020, BurgerFi (listed on NASDAQ as “BFI”) had a market cap of around $250mm [9]. 

After going public at the end of 2020, BurgerFi acquired Anthony’s Coal Fired Pizza & Wings for $161mm ($33mm in common stock, $53mm in new junior non-convertible preferred equity, and the assumption of $75mm in existing debt) in November 2021. This acquisition was part of a strategy to expand the company’s premium fast-casual platform [5], and by the end of 2022, the company had fully integrated the back-end operations across both brands, generating over $2.5mm in annualized synergies [8]. After acquiring Anthony’s BurgerFi’s changed its fiscal year to end in early January of the next year rather than December 31 of the same year; FY 2022 ended on January 2, 2023 and FY 2023 ended on January 1, 2024 [7] [12]. The Anthony’s acquisition significantly boosted revenues: BurgerFi’s consolidated annual revenue increased from $69mm in FY 2021 to $179mm in FY 2022. However, the acquisition also significantly increased operating costs. Anthony’s accounted for 76% of the $144mm in restaurant-level expenses (direct costs tied to running individual restaurants) while contributing 72% of total revenue in FY 2022. These expenses made up around half of total operating expenses in FY 2022. Despite the added cost, restaurant-level profit (restaurant sales – restaurant-level opex) rose from $7mm in FY 2021 to $23mm in FY 2022, while restaurant-level expenses as a percentage of revenue remained steady at around 85% [7]. 

As we’ll get to shortly, the acquisition of Anthony’s was poorly timed and failed to help BurgerFi improve its bottom line; net income losses totaled negative $123mm in FY 2021 and negative $103mm in FY 2022. With capex totaling $11mm in FY 2021 and $2.5mm in FY 2022, free cash flow came out to be negative $18mm in 2021 and negative $0.3mm in FY 2022 [7]

Corporate Structure 

BurgerFi’s growth and acquisitions gave it a broader operational footprint, so let’s briefly break down the company’s corporate structure. 

BurgerFi International, Inc. is the parent company. Under that, the company is split into two brands: BurgerFi and Anthony’s Coal Fired Pizza (ACFP). The green boxes represent limited liability companies that are treated as part of their parent company for tax purposes, and the orange boxes represent separately taxable legal entities. BF Restaurant Management, LLC owns all of the company-operated units, and BurgerFi IP, LLC holds all of the company’s intellectual property. It is common for companies that franchise stores to have a separate entity that holds and licenses the IP back to the operating businesses and franchises, who use the brand in exchange for royalty payments. In doing so, the company is able to isolate its IP from any operational risk [3]. 

Business Model

BurgerFi operates a hybrid business model that combines corporate-owned and franchised locations under its BurgerFi and Anthony’s brands. In order to keep capex low, the company has an asset-light franchising model; the company does not own any real estate and leases all of its corporate-owned locations. In 2022, BurgerFi formally launched the Anthony’s franchise program which, alongside the BurgerFi franchise program, aimed to expand the brand through franchised locations rather than building new, corporate-owned stores. BurgerFi’s franchise agreement includes a 10-year contract, $45,000 initial per-store fee, royalty fee of 5.5% of net sales, and advertising fee of 2% of net sales [7]. 

BurgerFi also heavily leveraged technology both in-store and off-premises to support its operations. Investment in digital infrastructure before and during the COVID pandemic allowed the company to recuperate the decrease in in-store restaurant sales. BurgerFi had traditional digital platforms such as its LevelUp app, which allowed users to order ahead for pickup and participate in loyalty programs, and Oracle digital ordering kiosks, which enabled contactless ordering. However, the company also collaborated with third-parties to deliver more unique digital platform ordering systems. In addition to partnering with major delivery platforms like DoorDash and UberEats, the company integrated the technology platform Olo to develop its own app to facilitate third-party deliveries, allowing unlisted delivery apps to compete for delivery orders as well. BurgerFi also partnered with REEF technology to open ghost kitchens built exclusively for delivery, expanding the availability of its offerings [11]. 

All of BurgerFi’s digital developments enabled the digital platforms (delivery and app) portion of systemwide sales to increase by 64% to $39mm in FY 2020, even while total systemwide sales decreased from $146mm in FY 2019 to $129mm in FY 2020 due to COVID [10]. Digital platform sales, constituting 43% of systemwide sales in FY 2020, were a major factor in helping FY 2020 revenue ($34.3mm) slightly surpass FY 2019 revenue ($33.6mm), despite less foot traffic and other challenges posed by the pandemic [10]. Digital channel percentage of systemwide sales has consistently made up over one-third of systemwide sales since then [6] [12]. 

It’s clear how BurgerFi’s business model is structured to adapt across multiple sales channels. The company has four revenue streams [6] [7]: 

1. Restaurant sales: This is the revenue earned from company-owned locations, regardless of transaction method; this includes in-store dining, takeout, and delivery. Restaurant sales make up the majority of BurgerFi’s revenues, accounting for around 84% of total revenue in FY 2021 and 94% in FY 2022 and FY 2023. The jump in restaurant sales in 2022 and 2023 was driven by the full consolidation of Anthony’s restaurant revenue following its November 2021 acquisition by BurgerFi. 

2. Royalty and other fees: These are the ongoing percentage-of-sales payments made by franchisees to the franchisor, as well as miscellaneous income. Following restaurant sales, royalty and other fees made up 12% of total revenue in FY 2021 and 5% in FY 2022 and FY 2023. 

3. Royalty – brand development and co-op: These are fees franchisees pay specifically for marketing, brand development, and advertising. From FY 2021 – FY 2023, these fees constituted around 1% of total revenue. 

4. Franchise fees: These are one-time fees paid by franchisees when they sign a new agreement to open a location. There were no franchise fees for FY 2022, but franchise fees made up around 1% of total revenue in FY 2021. 

Causes of Distress

Despite the acquisition of Anthony’s and subsequent revenue increases, the consolidated company was still unable to generate positive net income. As a refresher, the company’s net income from FY 2021 – FY 2023 was negative $121mm, negative $103mm, and negative $31mm [9]. The underlying reason for BurgerFi’s downfall seems to be that the acquisition of Anthony’s was ill-timed; as we’ll get into later, consumer spending habits became much more conservative during the pandemic and never recovered. As a result, the initial allure of premium versions of fast-casual foods was not enough to sustain the consolidated company as discretionary spending decreased. From Q3 2021 (around the time of the Anthony’s acquisition) to the end of 2023, the company’s stock price consistently dropped from $8.66 to $0.86. Market cap in the same period also declined consistently from $155mm to $23mm [9]. 

With this in mind, let’s take a look at some key financial reasons that contributed to BurgerFi’s decline following the acquisition of Anthony’s. Given that Anthony’s was acquired in November 2021, we will use FY 2022 to benchmark consolidated performance as it reflects the first full year of operations with Anthony’s fully integrated. After the Anthony’s acquisition, BurgerFi had $15mm in cash at the end of 2021 along with $65mm in debt outstanding [6]; BurgerFi only slightly narrowed its net loss from negative $122mm in FY 2021 to $103mm in FY 2022. The bulk of the loss came from $115mm and $67mm of goodwill and intangible asset impairment charges in FY 2021 and FY 2022, respectively [7]. 

While impairment charges were the main cause of net losses in FY 2021 and FY 2022, they don’t entirely explain the continued losses into 2023; no goodwill and intangible asset impairment was recorded for FY 2023 [12]. Instead, there are three main reasons that ultimately contributed to the company’s September 2021 filing: (1) high opex, (2) declining same-store sales, and (3) debt that could not be paid back due to the first two factors.

High Recurring Operating Expenses

First, we can take a look at sustained high levels of operational costs. We can further split this category into rising ingredient costs and rising labor costs, two of the biggest categories in restaurant-level opex (which makes up over 70% of total opex) [12]. In BurgerFi’s FY 2023 10-K, the company cited this category as a key risk:

“Our profitability and operating margins are dependent in part on our ability to anticipate and react to changes in food and labor costs, which have increased, and may continue to increase, significantly… there is no assurance that we will be able to [mitigate the impact of cost increases] without causing decreases in demand for our products from our customers…” [12]

We will focus on that second part next. With regard to rising ingredient costs, BurgerFi had been experiencing increasing prices for chicken wings, a key ingredient for both of its brands, since 2019. Chicken wing prices were around $2-$2.50 per pound in 2019. During COVID, these prices, on average, rose to $3.00 and continued to increase until they peaked to $4.31 per pound in October 2021 [13]. Though these prices fell back to pre-pandemic norms by 2023, cost structures, particularly for Anthony’s (which relied heavily on chicken wings), had likely already experienced margin compression and were unable to recover by the company’s September 2024 filing. 

Concurrently, labor and related expenses as a percentage of restaurant sales increased from 29.8% in FY 2022 ($49.8mm) to 31.3% in FY 2023 ($50.3mm) due to increased per hour labor rates and inefficiencies [12]. In Q1 2024, labor expenses as a percentage of restaurant sales increased to 34%, reflecting the steady increase of wage pressures and staffing inefficiencies [14]. 

These two factors combined resulted in restaurant-level opex of $144mm in FY 2022 and $137mm in FY 2023. While this represents a nominal decrease in spending, it doesn’t necessarily reflect improved efficiency. In the same period, revenue declined from $178mm and $170mm, meaning restaurant-level opex alone still consumed a large portion of sales (81% in FY 2022 and 77% in FY 2023, which are still high despite the improvement). High levels of restaurant-level opex continued to climb, reaching nearly 90% of revenue in Q1 2024 [14].

When we factor in the remaining recurring operating expenses on top of restaurant-level opex (ignoring impairment costs and one-time store closure, restructuring, and pre-opening costs) we see that total recurring opex ($201mm in FY 2022 and $184mm in FY 2023) were both around 110% of revenue for both years, even before accounting for one-time expenses and debt-related payments [12]; BurgerFi’s high opex prevented the company from having enough cash to cover its operating costs and service its debt, which would ultimately lead to the company defaulting on its largest debt obligation. 

Decreased Traffic 

Second, sales were decreasing. In Q1 2024, systemwide sales (as a reminder, systemwide sales combined sales from both corporate-owned and franchised locations) were down 17% from Q1 2023, falling from $73mm to $66mm [14]. The decline in sales was primarily due to less traffic at existing stores associated with decreases in same-store sales [12]. 

The COVID pandemic accelerated the decline in foot traffic, and BurgerFi’s positioning as a premium (but discretionary) brand exacerbated the impact; customers were no longer willing to pay higher prices for fast-casual offerings; BurgerFi’s signature “BurgerFi Cheeseburger” costs around $9, while a McDonald’s Big Mac and BurgerKing Whopper both cost around $6 [25]. BurgerFi was not the only fast-casual chain to feel this impact. Even traditionally affordable chains like McDonald’s and Burger King started introducing value meal deals in mid 2024 to address declining customer sales. McDonald’s referred to this industry-wide problem as “trading down,” where consumers increasingly opt for low price, value items on menus rather than premium offerings [13]. As a result, same-store sales for BurgerFi decreased for both corporate-owned and franchised locations in 2023, dropping by 4% and 6%, respectively. BurgerFi brand experienced a larger decrease than Anthony’s, with sales dropping by 12% for corporate-owned locations and by 6% for franchised locations. Digital channel sales for the consolidated company also decreased by 4% in FY 2023 [12]. Declines in sales persisted into 2024, and BurgerFi reported a net loss of $6.5mm in Q1 2024 [14]. 

Mounting Debt 

Even after ignoring the impairment charges and other one-time operational expenses, the company was already in a deficit. Thus, when we look at operating cash flows (cash inflows from operations – cash operating expenses), we can better understand how high opex (high operating expenses) and decreasing traffic (decreasing cash inflows) contributed a decrease in operating cash flow from $2mm in FY 2022 to negative $5.3mm in FY 2023 [12]. 

To understand how BurgerFi’s high opex and declining sales contributed to the company’s inability to service its debt load, let’s look back to the acquisition of Anthony’s in 2021. As part of the acquisition, BurgerFi became a borrower under the Senior Credit Facility, which Anthony’s entered in December 2015. Synovus Bank, Cadence Bank, Regions Bank, and Webster Bank (“Prior Senior Lenders”) were the initial lenders of this facility, and the Senior Credit Facility had a maturity date of September 2025 with $58mm outstanding due in September 2024. This amount outstanding was inclusive of $1.3mm in accrued interest and a $2.5mm protective advance later made by TREW Capital Management. Put simply, a protective advance is a short-term loan made by a lender to protect its collateral when the borrower is distressed. The protective advance agreement made by TREW will make sense shortly when we put it in the context of TREW’s assignment of the loan from the Prior Senior Lenders. The total amount of principal outstanding for the Senior Credit Facility summed to be $60mm, and BurgerFi also owed $18mm in principal outstanding for its Junior Term Loan owed to CP7 Warming Bag, L.P. [1]. 

As a direct result of declining sales and high opex, BurgerFi’s cash position grew precarious in 2024. While it may seem like the company’s $1mm quarterly cash burn in the year leading up to and including Q1 2024 was not significant, it’s important to note that BurgerFi didn’t have an abundance of cash on hand to begin with; since Q4 2021, the company reported an average quarterly cash on hand of $11mm [9]. As revenues tumbled while opex remained at high levels, the company ended Q1 2024 with $4mm in cash and went into Chapter 11 with only $1.6mm on hand, including a negative $5.3mm cash flow from operations in Q1 2024 [19]. 

In January 2024, BurgerFi missed principal and interest payments on its Senior Credit Facility and the company’s liquidity position dipped below minimum requirements. In response, the Prior Senior Lenders issued default notices in January and April 2024. Acknowledging the gravity of the situation, BurgerFi noted in their FY 2023 10-K (filed in January 2024):

“We have significant outstanding indebtedness and due to event of default on our Credit Agreement, we are not forecasted to have the readily available funds to repay the debt if called by the lenders, which exposes us to lender remedies.” [12]

Following these defaults, TREW Capital Management (a Chicago-based distressed restaurant lender and consulting firm) acquired the Senior Credit Facility lender position from the Prior Senior Lenders through an assignment in April 2024 [1]. 

Pre-Filing Initiatives

By the end of 2023, BurgerFi had free cash flow of negative $7.5mm [12] and free cash flow of negative $4mm in Q1 2024 [14]. Rather than forcing BurgerFi into immediate bankruptcy, TREW BurgerFi entered a forbearance agreement in May 2024 that allowed BurgerFi to access the remaining $2mm of credit under the Senior Credit Facility. At the same time, CP7 (the lenders of the Junior Term Loan) made amendments to the secured promissory note they entered into with BurgerFi in February 2023. These amendments gave BurgerFi a $2mm incremental term loan and increased the interest rate on the Junior Term Loan to 12.5% [17] [18]. 

In accordance with the forbearance agreement, BurgerFi could have completed a transaction outside of Chapter 11 if the company was able to secure a buyer before July 31, 2024. Thus, the company retained Kroll to commence a sale process. A total of 139 buyers were contacted and 62 received the Confidential Information Memorandum (CIM). A CIM is a detailed document prepared by a company that covers essential sale-related information, given to qualified buyers under NDA to help them assess the opportunity. Nine buyers indicated interest and were asked to submit letters of intent (non-binding documents that outline key terms a buyer proposes for a potential transaction) in the form of stalking horse bids. However, BurgerFi failed to secure a binding deal by the forbearance agreement deadline. 

To protect its newly acquired position, TREW provided the $2.5mm protective advance, mentioned above, while the company turned to a management overhaul as a last attempt to avoid bankruptcy [1].

BurgerFi’s management restructuring began in July 2023, when BurgerFi initiated leadership changes in an effort to stabilize operations and improve financial performance. The company appointed Carl Bachmann as CEO and Chris Jones as CFO. Both of these professionals had prior experience leading restaurant turnarounds and managing public companies, with Bachmann as the former President and CEO of Smashburger since January 2019 and Jones as CEO of Odyssey Marine Exploration, a deep sea exploration company. The company continued its management overhaul in August 2024, appointing two (out of three) new Board members: David Gordon and Michael Epstein. Gordon and Epstein were also added to the Audit, Compensation, and Nominating Committees to strengthen overall management. Following a review of current restaurant performance, the company closed 18 underperforming stores (9 BurgerFi brand locations and 9 Anthony’s locations) in August and September 2024. Additionally, the company also retained Hilco Real Estate to assist in renegotiating rent concessions and reducing occupancy costs [1]. 

Chapter 11 and Sale to TREW

Despite new management’s attempts at improving cash flow, BurgerFi’s position as a defaulted company barely surviving off the terms of its forbearance agreement and emergency financing left it with little flexibility to address its obligations. With no binding sale in place, deteriorating liquidity, and pressure mounting from secured lenders, the company filed for Chapter 11 in September 2024 to pursue an orderly sale through a court-supervised process. 

To cover its expenses while the company ran a sale process, BurgerFi negotiated a $5mm 12.5% PIK DIP facility with TREW consisting of $3.5mm in interim funding and an additional $1.5mm available post-final order. In addition to the $5mm of new money, the DIP facility also included a $7mm interim roll-up of preposition debt and an additional $3.4mm roll-up term loan. The liquidity provided by the DIP would be used to cover wages, leases, vendor payments, and other services necessary to insure BurgerFi’s assets [20]. 

Ultimately, BurgerFi pursued a separate but coordinated 363 sale process for its BurgerFi and Anthony’s brands. As a reminder, a 363 asset sale allows the debtor to sell assets free and clear of all liens, claims, and other liabilities, meaning the buyer will acquire all assets without existing obligations attached. TREW, already positioned as the company’s prepetition senior lender and DIP lender, emerged as the successful bidder for both of these brands through separate credit bids [21] [22]. The way a credit bid works is that a secured lender can use the debt the company owes it to buy the company’s assets instead of paying cash. For example, let’s say a company files for bankruptcy and owes $25mm to its secured lender. When the company puts its assets up for sale, the secured lender makes a credit bid of $25mm. What the lender is offering here is essentially a cancellation of $25mm worth of debt the company owes in exchange for ownership of its assets. This is allowed in a 363 asset sale because the lender has a first lien on the collateral. If no other bidder offers more than $25mm in cash, the lender wins the auction and takes over the company’s assets without putting in new money. Like our example, TREW’s credit bids were a textbook example of a loan-to-own strategy; by entering as a lender with superpriority positioning in the cap stack, TREW was able to convert debt into ownership without injecting new capital. This gave TREW an edge over other bidders since they didn’t need to deploy new cash and were already in control of the assets through their first lien claims. 

TREW acquired the BurgerFi brand for $10mm and Anthony’s for $44mm in October 2024, with each debt-for-equity transaction executed with a credit bid using outstanding amounts owed to TREW under the prepetition credit facility and DIP facility. For the BurgerFi brand, there was a competing $5.5mm cash bid from affiliates of the Catterton Management Company (PE firm focused on the consumer industry) and the Falcone Group (real estate development firm), but no other offers were submitted for Anthony’s. Both of these sales gave TREW ownership of substantially all of the company’s operating assets, including franchise agreements, corporate-owned restaurants (franchised locations were non-debtors), IP, equipment, and vendor relationships, clear of all obligations. As part of both transactions, TREW also extended post-closing designation rights through December 2025 which would allow it to decide which leases and executory contracts to assume or reject after the sale closed; this would give TREW flexibility to operate stores and evaluate individual locations before committing to keeping them. 

Future of BurgerFi 

TREW’s acquisition of BurgerFi reflects a larger strategy that the firm has pursued across the distressed restaurant space: acquiring underperforming brands and restructuring them under its control. Back in 2017, TREW’s founder and CEO, Jeff Crivello, took over Famous Dave’s when the company was experiencing declining sales and operational challenges. While Famous Dave’s never filed for bankruptcy, it was operationally distressed and faced strong competition from other restaurants. Under his leadership, Famous Dave’s was repositioned as the foundation for BBQ Holdings, which Crivello expanded aggressively through a series of opportunistic acquisitions targeting underperforming or undervalued brands. These included Granite City, Village Inn, and Bakers Square, all brought under a centralized operating structure to improve margins and unit economics [24]. By the time Crivello sold BBQ Holdings to Canadian MTY Food Group in 2022, it operated more than 130 company-owned and over 230 franchised units across multiple brands [23]. 

Fast forward to March 2024, when TREW acquired all of the senior secured debt of fellow distressed restaurant chain Rubio’s Coastal Grill just one month before buying the senior secured lender position for BurgerFi. Following a similar timeline to BurgerFi, TREW eventually won the credit bid to acquire Rubio’s in August 2024. Given TREW’s track record of successful turnarounds and band consolidation, BurgerFi looks to be in good hands to follow a similar recovery arc to long-term stability. 

Despite its modest size compared to other, larger bankruptcies, there are still valuable lessons to be learned from BurgerFi’s fallout. BurgerFi’s attempt at placing itself in the middle of fine dining and fast-casual resulted in the company being caught at the losing ends of both battles: high opex for premium ingredients and decreasing demand for the entire fast-casual industry. The company’s poor acquisition timing of Anthony’s also allows us to understand how BurgerFi fundamentally overestimated its demand in the fast-casual market. BurgerFi’s initial novelty quickly eroded as a series of strategic missteps and misjudgements of consumer priorities brought down the better burger company. 

While we don’t know the financial progress of BurgerFi since its acquisition by TREW, the company continues to embrace its premium branding by offering Wagyu and Black Angus burgers in early 2025, claiming these new menu items will bring “a sense of luxury to to the accessible dining climate…without the fine-dining price tag” [26]. It seems from the company’s blog posts that BurgerFi is consistently still trying to find ways to differentiate itself from traditional fast-casual dining experiences and won’t be stepping down from its better burger founding principles anytime soon. 

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