On Monday March 4, 2013, the popular North Texas-based Snuffer’s Restaurants Inc. announced that it had filed for Chapter 11 bankruptcy protection. In a public statement, an attorney said that the debt brought on by the national recession is what led to the Dallas bankruptcy. Snuffer’s, a local family-owned chain, operates throughout the Dallas-Fort Worth area and has drawn loyal fans for years. Increased competition from national chains as well as the sluggish US economy eventually weighed down the franchise.
What Chapter 11 Means for Snuffer’s
Fortunately, loyal fans of Snuffer’s cheeseburgers and cheese fries won’t have to worry about their favorite meals going anywhere anytime soon. Thanks to Chapter 11, Snuffer’s Restaurants Inc. will be able to function as normal and two of the seven local restaurants aren’t involved in the filing at all. The bankruptcy filing will allow the company to restructure its financial core and explore sales opportunities. Interesting facts to note:
- Chapter 11 is a popular option for companies such as Snuffer’s Restaurants Inc. who project higher long-term revenues than their debt or the value of liquidized assets. Snuffer’s is $6.5 million in debt. However, they pull in $14 million annually. The Chapter 11 bankruptcy filing allows the company to continue operating and restructure itself.
- This isn’t the first time Snuffer’s has faced financial trouble. In 2009, the company failed to pay bills in excess of $700,000. Bassham Wholesale Egg Co. filed a lawsuit in the Dallas County District Court.
- Snuffer’s isn’t the only restaurant struggling during the recession. During his lawsuit with Snuffer’s, Ronnie Bassham praised the company for being able to stay afloat while many others struggle. He said, “All restaurants now are in pretty bad shape, but Snuffer’s [is] probably better than 80 percent of the others.”
Despite the lavish praise, the sluggish economy and increased competition created a formidable atmosphere for the family-owned chain. Fortunately, Chapter 11 allows Snuffer’s to continue serving their signature burgers and fries for happy consumers in Dallas and Fort Worth.