Author Topic: Krystal Files Bankruptcy - 2nd Time  (Read 561 times)

jaxlongtimer

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Krystal Files Bankruptcy - 2nd Time
« on: January 22, 2020, 02:12:36 AM »
Seeing them close 2 stores here on busy highways appears to have been the canary in the coal mine for Krystal.

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Southeastern slider chain Krystal has filed for Chapter 11 bankruptcy protection, citing debts of as much as $100 million.

"The actions we are taking are intended to enable Krystal to establish a stronger business for the future and to achieve a restructuring in a fast and efficient manner," according to an emailed statement from the Krystal Co.

Company-owned and franchised Krystal restaurants will continue running as usual, it added.

In filing for bankruptcy in the Northern District of Georgia, Krystal Holdings listed debts between $50 million and $100 million.

The bankruptcy filing came just two months after the company announced a new executive team and hired an investment firm to try to franchise 100 to 150 of the Krystal units to other owners.

Krystal also filed for bankruptcy in 1997 in the face of millions of dollars of claims by employees for unpaid overtime, according to media accounts. Krystal was acquired from bankruptcy at that time by Port Royal Holdings in a $145 million deal.

The company was later sold and moved its headquarters to Atlanta from Chattanooga, Tennessee, after being acquired by private-equity firm Argonne Capital in 2012.

Founded in 1932, Krystal is known for its small, square hamburgers. It's the nation's second-oldest fast-food chain, behind White Castle, which started in 1921 and also is known for its sliders.

Krystal operates about 320 restaurants in nine states and employs more than 6,500 people.

https://www.cbsnews.com/news/fast-food-chain-krystal-files-for-bankruptcy-a-second-time/


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In its filing, Krystal cited several contributing factors toward its bankruptcy: Increasing competition, shifting consumer tastes and the rise of online delivery platforms all have made it difficult for the 88-year-old brand to thrive.

The filing also said that the tight labor market has it made it hard to find employees, and that it's not "uncommon" for quick service restaurants to have a 200% turnover rate.

"These challenges (together with company-specific business challenges) have resulted in deteriorating financial performance," wrote Jonathan Tibus, Krystal's chief restructuring officer.

https://www.cnn.com/2020/01/21/business/krystal-company-bankruptcy/index.html



JPalmer

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Re: Krystal Files Bankruptcy - 2nd Time
« Reply #1 on: January 22, 2020, 08:51:18 AM »
I guess we have our answer to the mystery behind the Krystal's in Mandarin closing.

I-10east

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Re: Krystal Files Bankruptcy - 2nd Time
« Reply #2 on: January 22, 2020, 09:24:08 AM »
It seems like Krystal was fine when they were based in Chattanooga. When they relocated to Atlanta, suddenly all of these woes started to occur. 
« Last Edit: January 22, 2020, 08:36:32 PM by I-10east »

bl8jaxnative

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Re: Krystal Files Bankruptcy - 2nd Time
« Reply #3 on: January 22, 2020, 04:19:46 PM »

Krystal's been headed down this path for quite awhile.  They've grown too long in the tooth.  A few years ago they announced plans to update their restaurants and menu.  But they don't seem to have updated it much. 

They've long struck me as being stuck.  They couldn't risk their current meager cash flow to make big changes.  But without doing that, they were going to keep getting squeezed as other cheap options like Cookout, WaWas, McDonalds, et al kept growing.  And some others are a smidge above them, like Culvers or Chik-fil-a were pulling in a big chunk of their customer base. 




sandyshoes

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Re: Krystal Files Bankruptcy - 2nd Time
« Reply #4 on: January 23, 2020, 06:02:07 PM »
In my happy-go-lucky youth,  nice hot Krystals and fries were a godsend after the discos closed up at 2 am.  When it's late and nobody else is open, they still are.  I just wish they were Milligan burgers. . . .

Snaketoz

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Re: Krystal Files Bankruptcy - 2nd Time
« Reply #5 on: January 24, 2020, 07:21:14 AM »
Every now and then I get a yearning for a good hot Krystal.  I would hate to see them go under.  I remember the days as sandyshoes said.  After the bars closed and on dates in high school, a few "gut grenades" would hit the spot, especially if you were low on funds.  Some of my friends swore that eating Krystals after several rounds at a bar would prevent a hangover the next day.