Restaurants Hit Hard by Economy and Bankruptcy

Restaurants have been especially hit by the downtrodden economy as the cost of food continues to rise. As evidence of this problem several restaurant chains have had to file for bankruptcy in 2010, including Charlie Brown's Steakhouse, Fuddruckers and Uno Chicago Grill Pizza. More restaurants are already on the brink of possible bankruptcy for this year, such as El Pollo Loco, Sbarro, Perkins & Marie Callender's Inc.

While it may appear to outsiders that a restaurant filing for bankruptcy is likely to mean the end of the franchise, this is not always the case. It can often mean a restructuring of debts that will give the restaurant certain legal advantages. For example, a restaurant chain that has over-expanded can, through a restructuring plan, sell some of its properties and end unnecessary leases to save money.

This year has seen an incredible rise in food prices, such as wheat which has increased 60 percent in 2011. Other vital ingredients like cooking oil, beef, cheese and vegetables are likely to hit cash-strapped restaurants even harder.

Considering bankruptcy?  Now is the time to contact our legal team to set up a consultation with a Chicago bankruptcy attorney.