Fast-food chain Krystal has filed for Chapter 11 bankruptcy protection despite efforts to shore up its bottom line by closing dozens of restaurants, USA TODAY reported. The Dunwoody, Ga.-based company, whose restaurants are scattered throughout the southeastern U.S., blamed rising labor costs and online delivery competition as factors leading to its bankruptcy. Krystal has 182 company-owned restaurants and another 116 franchise locations in 10 states, according to a court filing: Georgia, Tennessee, Alabama, Georgia, Florida, Kentucky, Mississippi, North Carolina, South Carolina and Arkansas. Most of its restaurants are located in suburban communities with many of them near interstate exits. "Shifting consumer tastes and preferences, growth in labor and commodity costs, increased competition, and unfavorable lease terms" were key reasons for the company's bankruptcy, chief restructuring officer Jonathan Tibus wrote yesterday in a court filing. Owned by K-Square Restaurant Partners LP, Krystal received an investment of $59.8 million in April 2018, which it used to repay $42 million of loans, fund "substantial remodeling" and make other investments, such as marketing, according to a court filing. The company closed about 44 locations over the last year, including 13 on Dec. 15, to boost its finances.
