Franchisees of fast-food burger chains, such as Checkers Drive-In, have filed for bankruptcy protection facing declining revenue and many times more debt than assets.
Checkers Drive-In franchisee C.S. Holdings of Tampa LLC, which operates two locations in Tampa, Fla., filed for Chapter 11 bankruptcy protection to reorganize its business.
The debtor did not give a specific reason for filing for bankruptcy in its petition.
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Checkers franchisee files for bankruptcy
C.S. Holdings filed its petition in the U.S. Bankruptcy Court for the Middle District of Florida on July 14, listing over $1.8 million in debts and over $569,000 in assets.
The debtor’s largest unsecured creditors include Bank Five Nine, owed over $1.6 million; Florida Department of Revenue, owed over $99,000; Kapitus LLC, owed $60,000; Highland Hill Capital, owed $50,000; and Chase business credit card, owed over $4,800.
The Checkers locations are independently owned and operated, and Checkers Drive-In Restaurants Inc. licenses its brand to franchisees.
Franchisor Checkers Drive-In Restaurants did not file for bankruptcy. Checkers & Rally’s were not immediately available for comment.
Gross revenue declines
The burger chain franchisee listed over $1.55 million in gross revenue for 2024, which declined to over $1.22 million in 2025. The company had generated over $426,000 in gross revenue in 2026 when it filed for bankruptcy.
The Checkers Drive-In chain is owned by Checkers Drive-In Restaurants Inc., which was created with the merger of the two burger chains in August 1999, according to Fandom.
Checkers was founded in 1986 in Mobile, Ala., by Jim Mattei and went public in 1991. Rally’s was created by Jim Patterson in 1985 in Louisville, Ky.
Checkers & Rally’s acquired in 2023
The company’s private equity owner Oak Hill Capital Partners sold the majority of the company in 2023 to investment firms Arbour Lane Capital Management, Garnett Station Partners and Guggenheim Investments in a restructuring and recapitalization transaction.
Checkers & Rally’s currently operate over 700 locations nationwide.
Financial distress has led several other burger chain franchisees to file for bankruptcy protection for a variety of reasons.
More burger chains file bankruptcy
A Checkers & Rally’s burger chain rival, Hardee’s restaurant franchisee Superior Star LLC , filed for Chapter 11 bankruptcy protection on July 9, facing an alleged seller financing dispute, according to court papers.
The Phoenix-based franchisee had purchased 93 Hardee’s locations in 10 states from Starcorp in 2023 but currently operates 59 locations in Midwestern states. The company closed about 12 locations in 2025, according to Nation’s Restaurant News.
The debtor and Starcorp are entangled in a financing dispute over a $7.04 million seller note, which prompted Superior Star to file for bankruptcy.
Another Hardee’s franchisee, ARC Burger LLC, filed for Chapter 7 bankruptcy liquidation on April 20, 2026, after franchisor Hardee’s Restaurants LLC sued the restaurant operator for alleged breach of contract, seeking to recover over $6.5 million in unpaid franchise fees and other obligations, according to Law.com.
The bankruptcy filing invoked an automatic stay while the debtor’s bankruptcy case proceeded.
Franchisees of the 107-year-old A&W Restaurants chain closed locations in April, but didn’t file for bankruptcy protection.
An A&W Restaurant located in Pocatello, Idaho, permanently closed its store at 1335 N. Arthur Ave., on April 2, 2026, as the franchisee was struggling financially and had its franchise contract pulled by the A&W corporation, Idaho State Journal reported.
A&W chain announced on social media that the Pocatello location, which opened in 2016, would close April 3, but after a wave of community support, the restaurant reportedly sold out of all of its remaining stock and closed a day early on April 2.
“Yesterday, we did a $4,500-day, when we used to do like $1,300,” Rollins told the State Journal. “It was so amazing. I even teared up a little bit, because I had been here since the start.”
A&W Restaurants also closed its location in the River Hills Mall in Mankato, Minn., on April 29, 2026, because of financial distress, the franchisee announced on its Facebook page.
Related: Key gasoline and jet fuel distributor files Chapter 11 bankruptcy
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