(Gray News) - Krystal, known for its iconic tiny burgers, filed for Chapter 11 bankruptcy protection on Monday.
The Dunwoody, Ga., based company, which calls itself the South’s oldest fast-food brand, said it owes its creditors between $50 million and $100 million, according to the Nation’s Restaurant News.
Its restaurants will remain open while it restructures and pays off debt, the company said in a statement. Its largest creditors are The Tombras Group media agency of Knoxville, Tenn., at $4.2 million and US Foods Inc. of Rosemont, Ill., at $2.9 million.
“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 in a statement Monday afternoon. “We are pleased to be ready to move toward a brighter future for the brand and have the support of our stakeholders.”
The Krystal Company was founded in Chattanooga, Tenn., in 1932. The chain said it has about 320 restaurants in nine states.
In the fall of 2019, the company announced a plan to sell off to franchisees more than 100 of the 202 company-owned restaurants for sites in Alabama, Florida, Georgia, Mississippi and Tennessee, the Nation’s Restaurant News reported at the time. The company was also experimenting with a smaller restaurant prototype.
Even though the company announced an increase in sales for 2019, the Chattanooga Free Press reported that the costs of restructuring and renovation left the company in debt.
Krystal established a “restructuring information hotline” at (888) 249-2792 (U.S./Canada) or (310) 751-2607 (international).
The Chattanooga Free Press said the company previously filed for bankruptcy in 1997 because of millions of dollars in employee claims for unpaid overtime.