Famous Toastery Franchisee Files for Bankruptcy
A popular Charlotte-based breakfast chain is going through a rough patch at some of its franchise locations. Famous Toastery locations across Eastern North Carolina have closed suddenly over the last month.
According to The Herald Sun, the closed franchise locations in Morrisville, Garner, and Holly Springs were owned by former software CFO Jim Buchanan. He opened the three restaurants in 2017.
The franchise group that owns and operates the Famous Toastery in Cary, North Carolina, filed for Chapter 11 bankruptcy protection on July 15. In court filings, “the firm claims debts between $500,000 and $1 million and assets of less than $50,000,” The Herald Sun reported.
"Our outlook is strong and new franchised and corporate stores are currently under construction and opening this year," Famous Toastery's CEO and co-founder Robert Maynard said in an email to FSR. "We have franchisees who independently own and operate restaurants, and these locations were closed by two different franchisees. We acknowledge the bump in the road but are 100 percent confident in the brand and the franchisees we have. The future for Famous Toastery is bright and strong."
The restaurant in Cary is still open at the moment and will remain for the time being. This particular location is operated by Kessel’s Classic Ventures Group, which is owned by a former NASCAR marketing executive Dean Kessel.
Famous Toastery has been a leader in the better-breakfast restaurant movement since it opened in 2005. Growth began to accelerate in 2014. At the time, the chain only had three locations, but Maynard along with co-founder Brian Burchill felt it was the right time to kickstart expansion.
In 2018, there were 34 Famous Toastery restaurants throughout along the East Coast. There are 28 now, according to its website. Burchill and Maynard talked to FSR in November about further plans to speed up growth.
“We’re a bootstrap company. You’re going to see Rob and I and the leadership team getting in there and getting dirty doing everything that we can do from the inception of the restaurant to the end to the process and everything. We’re very, very hands on and we want to keep it that way for now,” Burchill says. “People open restaurants left and right, but if you don’t have the passion and heart to follow and just keep on getting better and better for the customer then you’re not giving 100 percent to them and then, why do it? So, it’s taken a while for us to get to that level.”
The company had plans to open 12 new locations by the end of 2019. It’s unclear how these closures will affect Famous Toastery’s trajectory.
Kessel and Buchanan have yet to comment on the recent closures.