BurgerFi is having difficulties running its chain of restaurants in the United States. According to reports, the burger chain is running out of cash needed to keep it afloat, and servicing its numerous customers across the US is becoming a challenge.
The popular fast food company, which boasts a total of 120 restaurants in the United States, is on the verge of declaring bankruptcy after it took a hard but necessary step to inform the SEC that it is expected to post losses totaling up to $18.1 million for the second quarter, which just ended in July. This loss is the second time the company is recording a deficit in its operations in July following its record of $6.1 million in the same month last year.
What steps has BurgerFi taken to deal with losses?
BurgerFi has not stopped in its decision to inform the Security and Exchange Commission (SEC) of its impending bankruptcy as the only step to take. The company also notified its investors of its limited cash flow. This is because it only has $4.1 million in cash flow and, from all indications, will not be sufficient to keep its 102 restaurants in the US running. To offset the effect of this, it could seek some protection under the bankruptcy laws that are applicable in the US if it receives some cash from investors, helping it stay afloat for some time.
Has any of its restaurants been closed down?
Another necessary step that BurgerFi would have to take would be closing down some of its restaurants in the US, where many of its long chains of restaurants are located. The company has not determined the number of restaurants that will have to be closed in the coming days to grapple with the unfavorable reality of the economy, but it did take the step to close down eight of its stores located at different locations in May.
The company will also have to deal with the laying off of workers, as they will not be able to maintain the cost involved in keeping the restaurants where they work running and serving customers who are hard to come by at the moment.
Inflation hits American businesses
BurgerFi is not the only business affected by inflation in the US. The high inflation rate has seen over 3200 stores shut down across the 50 states in the US. This number is 24% higher than in 2023 during the same period, confirming that the country is experiencing one of its worst hits of inflation in recent years.
Companies such as Red Lobster, CVS, and The Body Shop are all expected to close down some of their stores. The Dollar Tree/Family Dollar is expected to shut down over 600 of its stores by the end of 2024.
With the current prices of goods still over 20.9% higher since the last pandemic-induced inflation happened in 2020, there is every possibility that things would have to get worse before they get better for BurgerFi and other companies that operate businesses in the US.
