Krystal, the southern fast food chain known for its miniature square burgers served on steamed buns, has filed for bankruptcy.
According to court documents obtained by the Associated Press, the company specifically filed for Chapter 11 bankruptcy protection on Sunday, citing debts of between $50 million and $100 million.
The money owed is to a variety of vendors, such as equipment and food suppliers, the AP said, while CNN Business adds that the company’s assets are worth less than $50 million.
The filing doesn’t mean Krystal is shutting its doors at the moment, though. Despite court records that detail the closing of over 40 restaurants (over one-quarter of that number just last month), “the actions we are taking are intended to enable Krystal to establish a stronger business for the future and to achieve a restructuring in a fast and efficient manner,” the company said Tuesday in a statement, the AP reports.
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It’s the ooey, gooey cherry on top of a perfectly-steamed Krystal. Cheese, we love you. #nationalcheeseloversday
A post shared by Krystal (@krystal) on Jan 20, 2020 at 9:32am PST
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Krystal was founded in Chattanooga, Tennessee, during the Great Depression, just over a decade after Midwestern-founded White Castle, also known for its tiny, square burgers. Krystal is known as the oldest fast-food chain in the South.
Throughout the southeast, Krystal has around 300 locations — about one-third of which are operated by franchises. Close to 5,000 employees work for restaurants owned by the company itself.
Court documents say that the 10 states Krystal’s restaurants are presently in are Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.
Happy Fast Food Day! #FastFoodDay #LiveALittle
A post shared by Krystal (@krystal) on Nov 16, 2019 at 8:49am PST
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Krystal recently brought new top leadership into their business. In November, they announced that President and CEO Paul Macaluso and CFO Berry Epley were departing (Macaluso after just over a year and a half with the company), and would be replaced by Tim Ward and Bruce Vermilyea, respectively.
“Krystal is a brand that I have long admired, and I could not be more excited about the opportunity to lead this organization,” Ward said in a statement. “I have long felt that Krystal had so much more potential as an iconic, 87-year old brand, and I’m looking forward to making that happen.”
The previous month, Krystal revealed plans to franchise between 100 and 150 of its restaurants in Alabama, Florida, Georgia, Mississippi and Tennessee. Macaluso said of the move in a statement, “We’re ready for the next step in the brand transformation that began when I came on board in 2018.”
The company has pushed various promotions over the past year, including an “All-You-Can-Eat Krystals and Fries” deal for $5.99 last summer.