Dive Brief:
- BurgerFi’s board of directors has created a special committee of directors and engaged Kroll Securities as financial advisor as management explores strategic alternatives, the company said in a press release Thursday.
- BurgerFi also appointed board member David Heidecorn, senior advisor to and former partner at L Catterton, as chairman of the board succeeding Ophir Sternberg, who resigned from all positions in the company on May 23.
- BurgerFi entered into retention agreements with CEO Carl Bachmann, who joined the chain in 2023, and CFO Christopher Jones, to ensure steady leadership during the review process.
Dive Insight:
The company had a rough first quarter, with BurgerFi’s same-store sales declining 13% and systemwide sales down 17%. Sister brand Anthony’s Coal Fired Pizza & Wings fared slightly better with a same-store sales decline of 2%. Management attributed the sales declines to a difficult consumer environment and unfavorable weather, but its challenges have been ongoing.
At the end of 2023, the burger chain reported a same-store sales decline of 8%, according to an earnings release. The company ended last year with a net loss of over $30 million, an improvement compared to its net loss of more than $100 million in 2022. Net losses for Q1 2024 improved to $6.5 million compared to over $9 million in the year-ago quarter, “due to lower share-based compensation expenses, lower general and administrative expenses, and lower restructuring costs.”
The company has been working to improve operations and implement new back-of-house technology. It is in the midst of rolling out new inventory control systems at both of its brands and a new point-of-sales system at Anthony’s. The technologies will ostensibly help streamline operations and improve sales.
“We are committed to considering all potential strategic alternatives,” Heidecorn said. “While we are confident in the Company's current operating strategy, we are mindful of the Company’s current liquidity challenges and are committed to exploring strategic alternatives that we believe would be in the best interests of the Company and its stakeholders.”
The press release said that there was no guarantee that the review process would result in a favorable outcome for the company and stakeholders. BurgerFi said it wouldn’t comment further on this process, but would make additional announcements in “accordance with its ongoing disclosure obligations and pursuant to applicable laws and regulations.”
