The fast-food burger industry in the United States is navigating turbulent waters as numerous franchisees face financial distress and file for Chapter 11 bankruptcy. In a sector long dominated by household names such as McDonald’s, Wendy’s, Burger King, and Sonic, mid-tier and regional players are finding it increasingly difficult to stay afloat.
Rising operational costs, shifting consumer preferences, and intensifying market competition have collectively contributed to the downfall of several once-thriving burger chains.
Burger King Franchisees Face Bankruptcy Wave
Among the most prominent names affected by this industry shake-up is Consolidated Burger Holdings LLC. This major Burger King franchisee, based in Destin, Florida, operates 75 locations across Florida and Georgia and employs over 1,500 workers.
On April 14, 2025, the company filed for Chapter 11 bankruptcy protection, listing between $50 million and $100 million in both assets and liabilities. Although no specific reason was cited for the filing, industry experts suggest a combination of declining revenues, a prolonged legal dispute with Burger King Corporation since 2019, and mounting financial pressure as contributing factors.
The legal battle finally ended in a settlement in September 2024.
Consolidated Burger Holdings isn’t alone in its struggle. Other Burger King franchisees have also been forced into bankruptcy:
- Meridian Restaurants Unlimited: Operated 120 Burger King outlets prior to its March 2023 Chapter 11 filing. During the bankruptcy auction in September 2023, 70 locations were sold for roughly $17 million.
- Toms King: Managed 90 Burger King stores before filing for bankruptcy in early 2023.
- Premier Kings: Once operated 172 locations, also filed for Chapter 11 in 2023.
These cases underline a broader issue within the Burger King franchise network: escalating operating costs paired with a shrinking profit margin make it increasingly difficult for franchisees to sustain operations.
Struggles Spread Beyond Burger King
The financial crisis within the burger sector is not exclusive to Burger King franchisees. Other chains have similarly experienced significant setbacks, highlighting the depth and breadth of the challenges facing this industry.
BurgerFi’s Failed Turnaround and Sale
BurgerFi, a newer player in the fast-casual burger space, found itself overwhelmed by financial pressures in 2024. Despite efforts to implement a turnaround strategy, the company filed for Chapter 11 bankruptcy in September 2024.
The chain cited inflation, rising labor costs, and a steep post-pandemic decline in consumer spending as core reasons for its failure. TREW Capital Management acquired the brand through a $10 million credit bid in November 2024. Just a month later, it sold the BurgerFi brand to rival Savvy Sliders.
Hwy 55 Files for Bankruptcy Amid Expansion Woes
On December 31, 2024, The Little Mint Inc., parent company of Hwy 55 Burgers Shakes & Fries, filed for Chapter 11 protection.
The company, which had expanded rapidly, was operating 22 corporate-owned restaurants and overseeing 71 franchises in the southeastern U.S. Rising costs and lingering effects from the COVID-19 pandemic forced the closure of 13 corporate locations prior to the bankruptcy filing.
Wahlburgers and Hy-Vee Split
Even celebrity-backed burger ventures are not immune. Wahlburgers, co-owned by actor Mark Wahlberg, saw a major shift in early 2025 when supermarket chain Hy-Vee Inc. shuttered all 79 Wahlburgers locations within its stores. Both parties agreed to end the partnership due to poor performance.
According to CEO Randy Sharp, these outlets represented only a small portion of Wahlburgers’ total revenue. The brand has since refocused on expanding standalone restaurants and currently operates approximately 40 nationwide.
Underlying Causes of the Crisis
Several key factors have contributed to the ongoing financial turmoil across the burger chain industry:
- Rising Costs: Inflation has significantly increased the price of key ingredients such as beef, dairy, and wheat. At the same time, labor shortages and minimum wage hikes have led to higher payroll expenses.
- Consumer Behavior Shifts: Post-pandemic trends reveal a growing preference for healthier options, home cooking, and convenience foods, diminishing traditional fast-food traffic.
- Market Saturation: Top-tier chains like McDonald’s and Wendy’s continue to dominate with robust advertising budgets and digital ordering capabilities, pushing smaller players to the margins.
- Real Estate Pressures: Lease agreements and ongoing maintenance costs add further financial strain, especially on franchisees with limited capital.
What Lies Ahead for the Fast-Food Burger Sector
The wave of bankruptcies sends a strong signal about the underlying instability within the fast-food burger industry. While industry giants are expected to endure and adapt through digital transformation and brand loyalty, smaller and mid-tier chains must take drastic measures to survive.
Analysts anticipate a wave of consolidation, with larger players potentially acquiring distressed assets at discounted rates. Meanwhile, innovation—such as AI-powered ordering, automation, and menu diversification—will be essential for adapting to new market demands.
Franchisees navigating this landscape must remain flexible, cost-efficient, and responsive to consumer trends if they hope to stay viable in an increasingly competitive environment. The next few years will be critical in determining which burger brands endure and which fade away in the ever-evolving fast-food landscape.
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