The “burger wars” of the 1980s, which featured strong advertising campaigns by McDonald’s, Burger King, and Wendy’s, have a new look today with different players.
Burger chains are battling economic challenges today, closing underperforming locations and, in some cases, filing for bankruptcy protection.
Wendy’s said it plans to close 5%-6% of its 5,831 US restaurants listed on its website, or about 292 to 350 underperforming units, by 2026, according to its Feb. 13 fourth-quarter earnings call.
“By closing consistently underperforming restaurants, we enable our franchise partners to increase focus on potentially profitable locations,” Wendy’s CEO Ken Cook said on the earnings call.
Burger chain franchisees have also filed for bankruptcy protection as they battle financial stress.
Geddo Corp., which operates 12 Farmer Boys burger chain franchises in California and Arizona, filed for Chapter 11 bankruptcy protection after the vendor’s advance loan withdrawals from its accounts blocked cash flow, preventing it from paying vendors, according to Restaurant Business.
The Riverside, Calif.-based fast-casual chain filed its petition in the US Bankruptcy Court for the Central District of California in Santa Ana on March 31, listing $1 million to $10 million in assets and liabilities, according to Bankruptcy Observer.
Geddo’s largest unsecured creditors include franchisor Farmer Boys Franchising Co., which is owed $500,000 in written capital, $300,000 in back rent and royalties, and $250,000 in mortgages, according to Bondoro.
Other top unsecured creditors include Marlin Leasing, which owes $139,000; Havadji Holdings, owed $39,000; and The Michaels Family Trust, which owes $21,000.
Geddo’s most significant debts that have caused him financial distress include 40 vendor loans, totaling $5.2 million, where lenders have begun collecting payments from his accounts, according to Restaurant Business.
Geddo Corp. planned to develop two locations in Goodyear and Phoenix, Ariz., and used a broker-dealer loan as part of that effort. The collection process of lenders on short-term loans, with high interest, is reported to require withdrawals directly from the business owner’s bank accounts, resulting in cash shortages.
The lack of funds in its accounts led the payee to fail to pay the Farmer Boys franchisor, vendors, and other customers. The debtor said most of its merchant cash advance lenders refused to negotiate manageable terms, and since it could not service those debt obligations, it filed for bankruptcy, the company reportedly said in court documents.
Farmer Boys, founded in 1981, operates more than 100 locations in California, Nevada, and Arizona. The restaurant chain’s menu includes cheeseburgers, bacon burgers, veggie burgers, chicken sandwiches, bacon turkey melt, BLT, club sandwich, pastrami sandwich, chicken strips, fried fish, salads, wraps, and breakfast items.
Geddo Corp.’s bankruptcy filing. following the Chapter 11 filing of another burger chain, as Carl’s Jr. Franchisee Sun Gir Inc., and five affiliates filed their petition in the US Bankruptcy Court for the Central District of California on April 2.
Sun Gir, which uses 65 Carl’s Jr. franchises in California, is the leading Chapter 11 case among franchisees.
Carl’s Jr. issued a statement, asserting that Sun Gir’s bankruptcy was an isolated situation involving a franchisee and not a broader problem within Carl’s Jr. chain.
“This situation is specific to this person’s financial and business circumstances,” a company spokesperson told Restaurant Dive. “This has no impact on the operations of any other Carl’s Jr. locations, and we remain committed to delivering a quality experience for our guests, while driving the profitable, sustainable growth of our franchises and our brand.”
Related: Award-winning brand files for Chapter 11 bankruptcy
This story was originally published by TheStreet on April 11, 2026, where it appeared first in the category Restaurants. Add TheStreet as a favorite source by clicking here.
