After a Franchisor Files for Bankruptcy

Bennigan's franchisees are still operating, but the uncertainties they face are heightened by cost pressures and the drop in diners' disposable income

What happens to franchisees when a franchisor goes bankrupt? Bennigan's owners are about to find out. The pub-themed casual dining chain filed a Chapter 7 bankruptcy on July 29, meaning it chose to cease operations and liquidate its assets rather than attempt to reorganize under Chapter 11. Bennigan's closed all company-owned locations and announced plans to sell off the assets. The remaining 138 franchisees are still operating, but they face a tough road ahead.

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