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Log In / Register | May 19, 2013

Fatburger Fizzles While Smashburger Sizzles

Ah, the better burger wars. There are some losers and some winners. Franchisor Fatburger continues to go through bankruptcy turmoil. This is the chain that has targeted celebrities as franchisees to get into the news. Kanye West, Queen Latifah and Montel Williams are but a few of the owners of its hamburger havens.

Another distressed restaurant chain seems to be having management problems as well. The famous Fatburger chain is still under bankruptcy court protection, six months after its filing. Included in the most recent retail Chapter 11 updates, Fatburger has recently announced the closing of eight company-owned restaurants that were collectively losing $1 million. The company also recently stated its intention to file its reorganization plans with the bankruptcy court before mid-November, which it hopes will include renegotiated leases and restructured debt.

... Since buying out the chain in 2003, CEO Andrew Wiederhorn has been on trial, in and out of jail, and fighting foreclosure on his personal residence. That may not be the cause of Fatburger's struggles, but it's at least got to be a little bit distracting. - Barbara's retail blog, About.com

But About.com's retail industry blogger also reports that while the house of Fatburger may be burning, the Smashburger chain is sizzling. The chain is owned by Consumer Capital Partners, the private investment arm of troubled Quiznos sub franchise chain and its founder Rick Schaden.

In addition to approximately 60 openings that rival Smashburger added to the 2009 store opening list, the company has also confirmed that seven new airport locations will be among the 18 new locations it has contributed to the 2010 store openings tally.

... Last month, avid Smashburger fans in Minneapolis saw the Spicy Baja Smashburger on Texas menus and decided that the southwest concoction would also be a smash hit in the great white north. So the Twin City smashies started campaigning via blog posts and Twitter tweets until the company agreed to add its jalapeno-chipotle-pepper-jack concoction to Minnesota menus. Smashburger issued plenty of press releases about the whole affair, saying that it was glad to make the menu change for Twin City fans, which it did with plenty of fan-fare. Who needs celebrity endorsements when you've got food that creates its own burger buzz?

Rick Schaden's Consumer Capital Partners recently saw the emergency sale of its collapsing franchise chain, 123 Fit, a franchise chain that it conceived and started.

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