Denny's Franchisee EYM Diner Files for Chapter 11 Bankruptcy
Dozens of Denny's diner locations face an uncertain future as major franchisee EYM Diner files for Chapter 11 bankruptcy. The filing follows a massive debt claim and operational declines, threatening restaurant units across Texas and Florida.
Dozens of Denny's diner locations face an uncertain future after EYM Diner, a longtime franchisee struggling with financial difficulties, filed for Chapter 11 bankruptcy protection in Texas. The filing marks the latest blow in a series of insolvencies tied to the restaurant empire owned by Eduardo Diaz, a former McDonald's executive.
EYM Diner operated approximately 30 Denny's restaurants at the time of the court filing, though several locations have already closed. Denny's corporate headquarters stated that it is working behind the scenes to help keep the remaining open restaurants operating. The bankruptcy follows a lawsuit filed last month by InterBank, which claimed the franchisee owes over $18 million and sought to sell the restaurants to a more capable operator.
Court documents cited a prolonged decline in restaurant performance under EYM management, noting severe sanitation issues in some locations. Mark Burgas, Denny's chief development officer, stated that the corporation has spent two years working with Diaz to sell the restaurants, and potential buyers within the franchise network are prepared to step in.
This follows another recent franchise bankruptcy involving M15 Inc., which closed several Denny's units in Minnesota and Wisconsin ahead of a Chapter 7 liquidation. Denny's itself went private earlier this year following years of business challenges and delisted from the Nasdaq stock exchange, operating a total of 1,274 restaurants as of the end of last year.
