Thirty-one Dairy Queen locations are shutting down after a major regional franchisee announced it’s filing for bankruptcy. Vasari LLC owns and operates more than 75 Dairy Queens in Texas and New Mexico — some of which have already closed.
CBS affiliate KLBK reports that the company has filed for Chapter 11 bankruptcy with debts between $10 million and $50 million. Chapter 11 bankruptcy is prominently used by corporate entities allowing them to remain in control of business operations and assets, unlike Chapter 7 bankruptcy, which calls for liquidation.
The company attributes much of its recent underperformances to Mother Nature, as multiple restaurants were affected by Hurricane Harvey. Many stores faced physical damage, extended closures, and loss of inventory.
An emergency motion in the bankruptcy case reads: “While certain of the [Vasari’s] stores are profitable, [Vasari] as a whole is facing net operating losses that cannot continue unabated.”
A full list of store closures can be found on the website of Donlin Recano, the professional services firm handling Vasari’s restructuring. The website will be continuously updated as the case goes on.
“This decision was based solely on what’s best to have a healthy company and ensure the long-term success of our core restaurants for our customers, employees and other stakeholders,” Vasari president and CEO William Spae said in a statement. “Given the support we have from our primary stakeholders toward a consensual plan of reorganization, we believe this process should have minimal impact on our customers and employees at the remaining restaurants.”
For more on the Minnesota-based fast-food chain, check out these 10 things you didn’t know about Dairy Queen.