Dairy Queen locations in Texas face bankruptcy, closure

by | Apr 26, 2018 | Bankruptcy

Dairy Queen is easily one of the most popular restaurant chains in Texas. After all, our state has more Dairy Queens than any other—a whopping 585. Sometimes, a cold ice-cream treat is necessary in the brutal Texas heat.

But dozens of local Dairy Queens will soon disappear. The Texas-based company Vasari LLC, which owns over 70 Dairy Queen franchise locations and is the second-largest Dairy Queen operator in the nation, recently filed for bankruptcy. As a result, 29 of these franchises will soon close permanently.

Declaring bankruptcy

Vasari cited several reasons for its declaration of bankruptcy and subsequent franchise closures. The company first claimed that Hurricane Harvey irreparably damaged its inventory and store locations. It also said that the recent decline in oil prices had affected its decision. Vasari later stated that its bankruptcy filing was also due to net operating losses from which the company could not recover. Many of its Dairy Queens were located in small, remote towns and simply did not generate enough business to turn a profit.

Ultimately, the company felt that declaring bankruptcy was its best option. Filing for bankruptcy will allow the business to mitigate its debts and recoup some of its losses. While losing these Dairy Queen locations may be sad for its ice-cream-loving patrons, Vasari’s bankruptcy declaration will provide the company much-needed relief.

Bankruptcy as a financial option

Bankruptcy is an option for private individuals and small businesses as well as large franchise-owners. There can be many reasons for declaring bankruptcy. Vasari cited a natural disaster, economic factors that were out of its control and declining profits. Other reasons may include a health crisis, hefty student loans or credit card debt.

When average Texans are struggling with overwhelming debt and simply cannot pay their bills, many choose file for bankruptcy. Declaring Chapter 11 or Chapter 7 bankruptcy can offer a clean slate and freedom from overwhelming debt.