Bradford J. Sandler Speaks to Restaurant Dive on Surge in Restaurant Franchisee Bankruptcies

Bradford J. Sandler was recently featured in a Restaurant Dive article entitled “Why multi-unit restaurant franchisee bankruptcies are surging in 2026,” which examines the reasons behind the sharp acceleration of bankruptcy filings among multi-unit restaurant franchisees. In the piece, Brad tells Restaurant Dive that there have been at least 10 significant multi-unit restaurant franchisee filings in 2026 representing several hundred locations across chains, including Hardee’s, Subway, Popeyes, Carl’s Jr., Moe’s Southwest Grill and Applebee’s. Noting that throughout 2025 there were more than 20 such filings, Brad says, “we’re on pace to match or exceed that in 2026.”

Brad attributes the trend to the underlying economic factors, saying, “food and labor costs have increased 36% since 2019, while franchisee margins typically run only 3%-to-5% pre-tax.” Compounding the pressure, “interest rates are still high, and fixed obligations, including royalties, ad-fund contributions, rent, and debt service, don’t soften when sales do.” He adds that the trend extends well beyond the well-known chain-level filings, stating there are a “substantial number” of smaller single- and few-unit operators whose bankruptcy filings have gone largely unnoticed — concluding “that variety and volume demonstrate that this is systemic, not cuisine or brand-specific.”

On strategy, Brad notes that through chapter 11, operators can shed unprofitable leases and sell viable units to better-capitalized franchisees. He contrasts franchisor responses to distress, comparing Burger King’s $2 billion-plus investment in remodel and support programs, which he says improved franchise unit profitability, against more adversarial approaches like Hardee’s litigation against and reclamation of locations from franchisee ARC Burger. Brad says, “franchisors that treat the balance sheets of their franchisees as a shared problem will ultimately keep their best operators, while those who don’t will keep meeting them in bankruptcy court.”

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