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Bravo Brio Restaurants LLC, the parent of Bravo! Italian cuisine and Brio Italian grille, served for the second time in five years in that chapter 11, has submitted bankruptcy protection, referring to the “acute financial need” with which industry is confronted.
On August 18, the company submitted to the Middel -District of Florida on August 18, aimed at restructuring its debt, streamlining and reducing operational costs, attracting subject -under -performing locations and attracting a new investor.
The company closed seven locations prior to submitting bankruptcy protection. In total there are 48 locations that are active throughout the country among both brands with around 4,000 employees. Forty -seven locations have been rented.
During the application, the company said that although the immediate impact of COVID-19 decreased, the country then had to deal with “unbridled inflation and a sharp doubling of interest rates”.
Bravo Brio Restaurants mentioned high inflation and interest rates as reasons for her financial struggle. (Getty / Getty images)
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This pressure hinded consumer spending in the industry, although the company said that the informal dining in the restaurant sector was “particularly hard”.
“Restaurants, especially legacy casual eateries, were disproportionately affected because they operate on thin margins, are highly dependent on discretionary consumer expenditure, and are confronted with a higher sensitivity to increases in food, labor and occupancy costs,” said the company in the food of the cost of the archivering.
Bravo said these were the reasons why there were several chapter 11 archives among older brands, including Red Lobster, Tijuana Flats, Friday’s and Hooters.
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Bankruptcy lawyer Daniel Gielchinsky projected in February that a Growing number of large restaurant chains will probably continue to submit in the coming years for bankruptcy protection.
According to Gielchinsky, founder and partner of the DGIM legislation established in South Florida, various factors led to their downfall.
The company closed seven locations before he was employed on August 18 on August 18 for Chapter 11 Bankruptcy. (Alamy / Alamy)
However, the COVID-19 Pandemie was the catalyst, because the industry saw traffic fall considerably. Operators wanted to keep their doors open, so they had to cover costs such as rent, insurance and payroll administration, although customers did not enter. To keep floating, restaurants relied on government subsidies, but also on the extraction loans to finance operating costs. This meant that companies collected debts that they had to repay over time plus interest.
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The problem, however, is that industry expected consumer expenditure in restaurants to return to pre-Pandemic level as soon as things were normal again. When that did not happen, debts could not repay those loans, according to Gielchinsky.
The COVID-19-Pandemic and High Inflation caused hardships for many Restaurants in the US (Getty / Getty images)
Topline income has never returned, according to Gielchinsky, who said that “customers are never back in full power” because of changes in their habits and spending capacity.
