A franchisee of Arby’s has filed for Chapter 11 bankruptcy. The Louisiana-based Miracle Restaurant Group LLC has reportedly filed for Chapter 11 bankruptcy protection twice. The franchisee runs 25 Arby’s restaurants in the following states, according to the outlet:
- Illinois
- Mississippi
- Louisiana
- Indiana
- Texas
The franchisee cited labor costs and commodity inflation “that price increases could not compensate for,” NRN said, citing court documents.
According to NRN, company manager Donald Moore stated in the filing that “this resulted in significant erosion in the variable cash earned from operations to cover the fixed costs of rent and debt service.”
Moore reportedly stated that sales at eateries that have opened in the last three years had fallen short of projections.
According to NRN, which stated that the franchisee was hampered by delays in receiving $3.5 million in tax refunds that were applied for under the Employee Retention Tax Credits. The refunds were requested between March 31, 2021, and September 30, 2021.
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As to the site, Moore stated that the franchisee filed an appeal with Arby’s corporate and its landlords, claiming that neither of their responses was significant enough to stop the bankruptcy filing.
NRN claims that Miracle enlisted the help of Peak Franchise Capital LLC to help sell its eight sites in Illinois, seven locations in Texas, and the remaining two locations in Indiana. Going forward, the franchisee’s only focus will be on its businesses in Louisiana and Mississippi.
Miracle initially requested protection from Chapter 11 bankruptcy back in 2010. At the time, NRN claims that it managed over 60 Arby’s outlets.
