Nation’s Restaurant News reported yesterday that a JBX franchisee, Kobra Properties, filed for Chapter 11 bankruptcy in Sacramento last week. Kobra operates 71 Jack in the Box units, four Qdoba restaurants and five T.G.I. Friday’s units. The company also owns the fine-dining eatery Crush 29 in Roseville, California and has other concepts in development.
“Like families, governments and businesses everywhere in the Sacramento area, America and around the world, our company is facing difficult financial challenges,” company founder Abe Alizadeh said in a statement. “In the face of these challenges, we’re taking action so we can fairly honor our financial commitments, protect the thousands of jobs we provide and restructure Kobra Properties so we not only weather the storm, but emerge even stronger.”
Clearly, these challenges are not specific to JBX. As I have said before, franchisees in general are more greatly feeling the impact of today’s difficult operating environment, and I would expect to see more franchise operators file for Chapter 11 bankruptcy and/or require increased financial support from their franchisors whether it be in the form of loans or deferred payments (please see my post titled “Franchisees are Really Feeling the Pinch” from November 20 for more details).