What happens to franchisees when a franchisor goes bankrupt? Bennigan’s owners are about to find out. The pub-themed casual dining chain filed a Chapter 7 bankruptcy on July 29, meaning it chose to cease operations and liquidate its assets rather than attempt to reorganize under Chapter 11. Bennigan’s closed all company-owned locations and announced plans to sell off the its assets. The remaining 138 franchisees are still operating, but they face a tough road ahead.
The first challenge for franchisees was to let customers know they were still open after the sudden closure of the corporate restaurants. “We immediately went to local news coverage,” says Larry Briski, president of the Bennigan’s Franchise Operators Assn. and owner of four Bennigan’s in the Chicago area. “Most of our franchisees did the same thing in their local markets.”
The collapse of S&A Restaurant Corp., which owned Bennigan’s and the Steak and Ale Chain, took franchisees by surprise.
Franchise Business Opportunities | Bennigan’s Franchisees May Buy Closed Locations on August 8th, 2008 at 7:01 am
[...] The Bennigan’s down the street may be shuttered for now, but its doors could be open again if the franchisees of [...]