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According to an article in the Star-Telegram, the largest CiCi’s Pizza franchisee, with 53 outlets has filed for Chapter 11 bankruptcy and expects to emerge as a viable new company.
The article said:
“Dallas-based Marwin Group has territories in eight states, including the Houston market in Texas. Marwin’s pizza management firm, Winmar Pizza, reported liabilities of $19.65 million, including secured loans of about $19 million owed to Frost Bank and $3.59 million in assets, according to its bankruptcy filing.”
This Chapter 11 bankruptcy may come as a surprise for many readers as the fast-food industry has long been considered impervious to the ravages of the recession. But this Pizza franchisee’s bankruptcy may prove an ominous sign of future troubles in the fast-food sector. To the surprise of some analysts many consumers who have faced job losses or who fear it, have decided to cut back on their fast-food intake. In previous recessions, fast-food always proved robust; but we may be in for a new development as this recession drags on. And it’s not just fast-food that’s being hit, as we discussed yesterday, many high-end restaurants are getting squeezed by the recession and find themselves facing bankruptcy. If the economy continues its downward spiral, the entire restaurant industry may face a large number of bankruptcies.
July 21st, 2009 at 9:17 am
The Marwin Groups Chapter 11 filing has much more to do with too rapid overgrowth rather than the recession. Marwin has borrowed more and more money from its investors over the last 5 years with no return at all seen for those investors. As business goes they are not doing bad in this current recession market. Their filing really does stem from money mismanagement and opening too many stores too quickly. They went from being a 7 unit operation to being a 90+ operation in a year and a half. Within 5 years they were back down to 50+ because they couldn’t afford to keep most of their stores open.