Getting a Fresh Start through Restaurant Bankruptcy
If you own a restaurant in the Tampa area and are considering filing for bankruptcy, it is important to know that you are not alone. To be sure, South Florida businesses file for Chapter 11 bankruptcy on a regular basis, and according to an article in QSR Magazine, bankruptcy might actually be able to save your business. What do you need to know about filing for bankruptcy in Tampa if you are currently running a restaurant? And how might a restaurant bankruptcy give you the opportunity for a fresh start?
Filing for Bankruptcy Can Be a Good Thing
When most Tampa-area business owners think about bankruptcy, they worry about the future of their businesses and consider only the negative impacts of bankruptcy. However, as the article points out, experts continue to emphasize that “bankruptcy doesn’t have to be a bad thing.” Indeed, for restaurant owners dealing with substantial debt, filing for bankruptcy can allow those business owners to “shed the weight of their debts and get back on the course toward success.”
For instance, a few years ago Sbarro—the fast-food Italian chain in numerous mall foodcourts across the country—filed for Chapter 11 bankruptcy. Why was Sbarro having a difficult time making ends meet? In short, the high cost of wholesale foods had driven the company into debt that it was having difficulty managing in an effective way. Yet after filing for bankruptcy, Sbarro did not close its doors nationwide. To be sure, residents of the Tampa area continue to see this restaurant chain thriving in shopping centers such as WestShore Plaza, International Plaza and Bay Street, and University Mall. And the latter is, according to a recent report in the Tampa Bay Times, “getting a major facelift.” In other words, renovations are likely to draw more shoppers to the restaurant than ever before.
According to Sbarro’s CEO, restructuring the restaurant’s debt allowed business owners to “save the brand.” And Sbarro is not the only Tampa-area restaurant to receive much-needed help from a Chapter 11 bankruptcy filing. According to an article in the Tampa Bay Business Journal, restructuring through Chapter 11 bankruptcy will allow 100 Montaditos, the popular restaurant chain with a site in The Shops at Wiregrass Mall, to deal with its debt and continue onward with its profitable locations.
Restaurants in Particular Benefit from Chapter 11 Bankruptcy
Another article in QSR Magazine recently revisited the issue of business bankruptcy, emphasizing that restaurants—perhaps even more so than other businesses—tend to benefit from filing under Chapter 11. For example, Back Yard Burgers, a restaurant chain with a presence in Florida, has been on an “upward tick” trend since filing for Chapter 11 bankruptcy in 2012. According to the CEO of that chain, “sweeping changes post-bankruptcy set the stage for 12 consecutive months of same-store revenue growth.” The company has continued to see an increase in sales since then.
For restaurants with multiple chains in the Tampa area, filing for Chapter 11 bankruptcy can require closing one or more of the locations that simply are not earning a profit. But closing a handful of locations can allow you to focus on other restaurant sites that are doing well in terms of profitability. It is important for Tampa restaurant owners to shed the notion that bankruptcy means an end to the business. Rather, Chapter 11 allows you to restructure the debts incurred by your restaurant, ultimately providing you with the opportunity to come back stronger in the South Florida economy.
For restaurant owners who have expenses that simply are exceeding their revenues, it could be time to think carefully about the benefits of filing for Chapter 11 bankruptcy. You should discuss your situation with an experienced Tampa bankruptcy lawyer as soon as possible. Contact Tampa Law Advocates, P.A. to learn more about your options.