Popular Sandwich Chain Declares Bankruptcy & Abruptly Closes 5 Locations
Bankruptcy has hit a series of beloved national and regional restaurant chains throughout 2024, casting a shadow of uncertainty over the future of some struggling concepts. Now, after 53 years in business, another chain has joined the list of 2024 restaurant bankruptcies.
Eegee's, a fast-food sandwich and frozen beverage chain that operates solely in Arizona, filed for Chapter 11 bankruptcy last week, Restaurant Business Magazine reported. The move came shortly after the company abruptly shuttered five of its locations, including one in Phoenix and four in Tucson, per local media reports. The Eegee's website currently lists 25 locations that are left in operation.
The reason for Eegee's bankruptcy filing? A growing list of restaurant chains have been struggling with dwindling popularity, drops in sales, or other financial obstacles over the past couple of years, and these issues seem to have made their way to Eegee's. The chain's system sales decreased 4.8% in 2023 compared to the prior year, according to data from the market research firm Technomic.
The company also said that both its assets (i.e. funds and resources it owns) and liabilities (i.e. what it owes to others) fall between $10 million and $50 million, and it has between 100 and 199 creditors. However, the Chapter 11 process will allow Eegee's to stay afloat as it reorganizes its debts.
Eegee's owner 39 North Capital said that it doesn't expect any additional closures at this time, the Tucson news outlet KOLD reported. Eegee's CEO Chris Westcott also told KOLD that eliminating the five recently shuttered locations would help the business as a whole.
"While the decision to implement these measures is difficult, it's a necessary step to preserve the brand's legacy and protect the future of our dedicated team, loyal customers, and the local neighborhoods we've proudly served for over 50 years," Westcott said. "As with many in our industry, we've encountered unprecedented challenges following the COVID-19 pandemic, as subsequent market conditions have created economic pressure throughout the restaurant industry. This restructuring will provide Eegee's the opportunity to strengthen its operations while upholding the quality and service our customers know and love."
Eegee's bankruptcy comes just a month after the famous casual sit-down chain TGI Fridays announced a Chapter 11 filing so it could reorganize its own finances. TGI Fridays has struggled for years with sales growth and restaurant closures and recently lost control of most of its assets this past fall after failing to file documents to bondholders on time.
Red Lobster, BurgerFi, and Buca di Beppo are among the other notable restaurant bankruptcies of 2024.
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