The lingering effects of the Covid-19 pandemic, high interest rates, and rising inflation have often been cited as the reasons for restaurant chain bankruptcy filings.
These reasons were among those cited by restaurant chains such as Red Lobster, BurgerFi, Rubio's Coastal Grill, and Buca di Beppo when they filed for Chapter 11 protection this year facing financial distress.
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Several restaurant chains, however, have also filed for bankruptcy protection mainly for reasons other than Covid, inflation, or rising interest rates.
In the case of Oakland, Calif.-based Red Bay Coffee, a chain of six coffee cafes, a roastery, and coffee van, the company said the effects of the Covid pandemic had a long-term impact on its financial situation, but rising costs of two lawsuits filed against the company had pushed the company into filing Chapter 11 on Aug. 29.
Another restaurant chain, Sonoma, Calif.-based Mary's Pizza Shack filed for Chapter 7 protection on Sept. 10, not for financial distress, but as a final step of a restructuring to convert the company's business from a single corporation into single family-owned units.
Hawkers Asian Street Food
Hawkers Asian Street Food files for bankruptcy
And now fast-casual restaurant chain Hawkers Asian Street Food on Sept. 16 filed for Chapter 11 bankruptcy to maintain operational control of the company and protect it from an overreaching lender, the debtor said in a statement to Nation's Restaurant News.
The Orlando, Fla.-based Asian restaurant chain's parent Hawkers Holdings and four affiliates filed petitions in the U.S. Bankruptcy Court for the Middle District of Florida listing $10 million to $50 million in assets and liabilities.
Related: Popular pizza chain files for Chapter 7 bankruptcy
The 15-unit chain in early 2023 signed "a debt capital agreement with the intention of growing the brand into a household name across the United States."
The company's lender in the last 60 days reportedly revealed an intention to gain control of the company, though Hawkers claims it has never missed a loan payment.
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A Chapter 11 bankruptcy filing places an automatic stay on any legal action against the debtor while it pursues its bankruptcy case.
"This filing will allow Hawkers to continue normal, uninterrupted operations and vendor payments while company control is re-stabilized in a way that secures a thriving and successful future for Hawkers and its dedicated team," according to a statement.
The debtor, founded in 2011, opened one new location last year, and had 18.5% sales growth, Nation's reported. The company in 2023 had a 26% increase in same-store sales and gross sales of almost $100 million.
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Hawkers operates restaurants in seven states, including Florida, Georgia, Maryland, North Carolina, Tennessee, Texas, and Virginia. The debtor reportedly plans to open new locations in the Washington, D.C. area; Charlotte, N.C.; and Texas. It will continue opening restaurants in current markets and then expand to new cities and states in 2026.
Hawkers menu includes many dim sum items, such as baos, dumplings, wontons; egg rolls, spring and summer rolls; wings; skewers; rice, curry, and noodle dishes; and vegetarian items.
It also features various craft cocktails, such as a Lemongrass Mojito, Five-Spice Old Fashioned, Malaysian Mule, and a Margari-Thai, as well as non-alcoholic tea and lemonade drinks.
Hawker was not immediately available for comment.
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