BurgerFi is in big trouble and could go out of business

new York
CNN
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BurgerFi, the fast-casual burger chain and owner of Anthony's Coal Fired Pizza, is running out of money — and options. The company said it may have to file for bankruptcy.

The company said it had only $4.4 million on hand as of August 14. It also expects a loss of $18.4 million for the quarter ending July 1. In the same quarter of 2023, the chain reported a loss of just $6 million.

BurgerFi's dire financial situation underscores the difficulties some fast-casual chains have had in recent months as diners grow tired of high prices and prefer to eat at home or look for better value when eating out. McDonald's, Starbucks, Burger King and Wendy's reported lower customer traffic and lower overall sales and has now expanded its offerings to include inexpensive meals to attract customers. At the same time, chains like Mod Pizza are trying to avoid bankruptcy and Red Lobster recently filed for bankruptcy.

The company said in a filing with the U.S. Securities and Exchange Commission that it “may seek protection under applicable bankruptcy laws” if it does not receive “adequate support from its senior lender” or other cash from outside providers or through the sale of its assets.

Under the terms of the loan agreement, the company's senior lender can call the debt due at any time. If that time were to occur now, BurgerFi would be unable to repay it. That means the lender could foreclose and take possession of BurgerFi's assets, the company said.

BurgerFi is the parent company of its namesake and Anthony's Coal Fired Pizza. Due to a lack of cash, BurgerFi is uncertain whether it can continue to operate its 60 pizza shops and 102 burger restaurants.

CNN has contacted BurgerFi for comment.

The company said store closures were the main cause of the drop in sales. Food prices also hurt BurgerFi – the company attributed the increase in operating costs to a rise in chicken wings prices and higher wages.

BurgerFi first raised the alarm in May when it announced it was exploring “strategic alternatives” due to its liquidity problems. Since then, the company has been trying to find additional financing, sell assets or the entire company, and “review and prioritize certain obligations over others,” the SEC filing said.

On August 9, the company agreed to receive $2.5 million in emergency financing from a lender.

However, there is no guarantee that these steps would be sufficient to pay off all debts, the company said.

BurgerFi (BFI) went public in 2020 and its stock has fallen nearly 60% since the beginning of the year. The stock lost 9% and was trading for just 33 cents on Monday.