During the current
bankruptcy upcycle, there have been particular waves of filings within
the restaurant industry. There was a string of casual-dining chain
bankruptcy filings. And one involving steak house chains. The current
trend involves Dunkin' Donuts franchisees.
Most recently, Kainos
Partners Holdings Co. LLC, which owns 56 Dunkin' Donuts stores in New
York, South Carolina and Nevada, filed for Chapter 11 in the U.S.
Bankruptcy Court for the District of Delaware on July 6.
Kainos
blamed its bankruptcy filing on the economic downturn and a decline in
consumer spending in the restaurant industry. However, the franchisee
also said in court documents that the facility where it bakes its doughnuts
"has been a major cash drain" since its inception.
Just days
earlier, on July 2, Kev Enterprises Inc. also filed for bankruptcy
protection in Tampa, Fla., but it blamed its Chapter 11 petition on
litigation with franchisor Dunkin' Donuts Inc.
But the list doesn't
stop there. In June, both Current River Capital LLC and AlphaRock LLC
filed for bankruptcy protection. Current River filed on June 25 in
Nashville, and Alpha Rock filed on June 5 in Tampa. Current River
operates seven Dunkin' Donuts and Baskin-Robins stores in Tennessee,
while AlphaRock has 18 stores in Florida, a story in the Quick Service Restaurant News & Trends said.
Both AlphaRock and Current River didn't explain why they were forced into bankruptcy protection in court documents.
According
to a Dunkin' Donuts' statement in the Quick Service Restaurant News &
Trends story about the Kainos bankruptcy filing, franchises going
bankrupt isn't uncommon.
"This experience is not uncommon for
restaurants even in the best of times," according to the statement. "We
are committed to doing the right things to manage the realities of the
present economic situation, even as we continue to look ahead with
optimism at the future."
Like other fast-food retailers, Dunkin'
Donuts has tried to broaden its menu. But apparently the sales of new
fare such as the waffle breakfast sandwich haven't been good enough to
prevent some franchisees from having to choke down some harsh economic
realities. - Jamie Mason
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