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Back Yard Burgers Files Reorganization Plan

Filed under Business

Memphis-based burger chain Back Yard Burgers filed a pre-negotiated Chapter 11 reorganization plan on Oct. 17, 2012, with the U.S. Bankruptcy Court for the District of Delaware. The Southeast regional QSR characterized the filing as the final phase of a plan to restructure debt, reduce operating expenses, and “position Back Yard Burgers to grow its business, including opening more locations throughout its targeted markets domestically and internationally.”

Growth may be the goal, but the near-term reality is that in the run up to the bankruptcy filing, Back Yard Burgers shuttered 19 of its company-owned restaurants “due to underperformance and prohibitive costs.” According to the Nashville Business Journal, the closures included six units in Memphis; four in Nashville; two in Jonesboro, Ark.; and seven in Little Rock, Ark.

The Nashville Business Journal quoted Back Yard Burger CEO James Boyd as saying, “no further action will be necessary to reach our financial targets.” The filing does not include BackYard Burgers’ franchised locations. The company said it “anticipates the restructuring process will be completed in early 2013.”

Founded 25 years ago in Cleveland, Miss., Back Yard Burgers had 2011 sales of $109.5 million according to Technomic’s “Top 500” list. That made it the 20th largest burger chain, with 120 locations at the beginning of 2012. Originally a double-drive-thru quick-service chain, Back Yard Burgers last year tested a new in-line prototype it called the Hermitage Grill. This fast-casual model offered a build-your-own-burger option. The chain’s menu features Angus beef burgers, turkey burgers, chicken sandwiches, hot dogs and smoked sausage.