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Burger King Franchise 2025
Why Are Hundreds of Locations Going Bankrupt?
The Financial Strain on Burger King
Our last Burger King video in 2023 had almost 3,000 comments (mostly negative). And just this week, another major Burger King franchisee filed for bankruptcy, affecting locations across three U.S. states.
If you watch the channel, you already know: the average Burger King franchise makes less than half of what an average McDonald’s does. According to the latest QSR 50 data, McDonald’s just broke the $4 million per year average gross revenue mark. In contrast, Burger King is still sitting at $1.6 million, so the earnings gap has widened even further heading into 2024.
And despite the revenue difference, the investment to open either franchise is relatively similar. A McDonald’s will cost you between $1.4 and $2.7 million, while a Burger King can range anywhere from $363,000 to $4.7 million. Most buyers will find themselves somewhere in the middle for either brand, so the cost isn’t drastically different.
In-Depth Analysis of Burger King's Current Challenges
Burger King also closed 264 locations last year.
In our 2023 video, we covered a previous Burger King bankruptcy and some of the ongoing problems facing the brand. That video now has over 350,000 views, and the viewer comments are overwhelmingly negative, feedback Burger King Corporate would do well to consider.
Here are just a few direct quotes from those comments:
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"Stores are usually hoooorible!"
Here are just a few direct quotes from those comments:
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"Woefully understaffed."
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"They keep renovating stores instead of helping franchisees."
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"Food sucks."
There were nearly 3,000 comments, and most of them weren’t flattering.
Burger King New Ownership
Burger King is now owned by Restaurant Brands International (RBI). 3G Capital, a Brazilian investment group, once held a 71% majority stake in the company. They aren’t very public about it, but that’s where the corporate structure stands.
Back to the news: the latest bankruptcy involves a large franchisee operating in Florida and Georgia, Consolidated Burger Holdings LLC, which has filed for Chapter 11 bankruptcy protection.
Locations Affected by Recent Bankruptcies
Tallahasse & Southern Georgia Locations
South Florida Locations
Florida Panhandle Locations
Tallahassee alone has 9 Burger Kings, so if you're in the area, you may notice changes soon.
The company filed in bankruptcy court citing $36.6 million in total debt and over 200 creditors (possibly as high as 998, the filing shows a range). They listed just $179,000 in cash and cash equivalents, but secured a $1.6 million DIP loan, a Debtor-in-Possession loan, which provides emergency funding during restructuring and gives the lender priority access to assets.
So Why Are Burger King Locations Going Bankrupt?
The company cites reduced walk-in traffic due to the pandemic, rising food and labor costs, inflation, and difficulty hiring and retaining employees. But what they didn’t mention is that Burger King previously sued this franchisee for failing to remodel its stores. Remodels are expensive, but they’re proven to increase sales and Burger King requires them. This franchisee allegedly didn’t comply, leading to legal action.
I'm not from the area but I am wondering were the stores really run-down?
Consolidated Burger Holdings LLC
Consolidated posted $67 million in revenue across all locations in 2024. Sounds like a lot, right? But when you break it down, that’s about $1.17 million per store, well below the system average of $1.6 million. And remember, that’s gross revenue. Expenses in the Burger King system are not low.
Consolidated now joins a growing list of large Burger King franchisees that have filed for bankruptcy, including:
Meridan Restaurant Locations (Bankrupt 2023)
Toms King Locations
Premier Kings Units
Many people think owning a big chain of restaurants is a money-printing machine—but that’s not generally the case.
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