Southern burger chain files for bankruptcy amid fears of mass closures

In the United States, particularly in the southern region, the burger chain Hwy 55 Burgers, Shakes & Fries has filed for Chapter 11 bankruptcy on December 31, 2023. The restaurant's parent company, Little Mint, Inc., which is based in Mount Olive, North Carolina, is facing significant financial distress and labor shortages attributed to the ongoing impacts of the Covid-19 pandemic. Currently, the company operates 22 corporate-owned locations along with an additional 71 franchised locations across North Carolina, South Carolina, Tennessee, Alabama, and Georgia. As part of its restructuring efforts, the company previously closed 13 of its corporate-owned locations. This action illustrates the financial challenges it has been grappling with, which have been exacerbated by decreased customer footfall, rising operational costs, and ongoing issues related to labor availability. Hwy 55 Burgers has estimated its liabilities to include approximately $11 million in secured debt and another $5.8 million in unsecured debt, an alarming situation that reflects the broader struggles many restaurant chains are currently experiencing in the wake of the pandemic. The financial turmoil faced by the chain aligns with the distress felt across the hospitality industry, which has had to adapt to changing consumer behaviors and economic pressures such as inflation. In the food service sector, the labor market has faced numerous challenges, leading to staffing shortages and challenging working conditions that have hindered operational efficiency. In connection with its licensing practices, Little Mint, Inc. also faced scrutiny for employing minors in violation of child labor laws, specifically assigning them to dangerous tasks and scheduling them for longer hours than permitted. This violation leads to further reputational damage amidst the financial turbulence the company is undergoing. In sum, the challenges faced by Hwy 55 Burgers are reflective of the precarious state of many food service establishments post-pandemic. As they navigate their bankruptcy proceedings, the fate of their numerous locations and employees remains uncertain, raising concerns about potential mass closures, job losses, and limited options for diners who have frequented these establishments over the years.