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Back Yard Burgers Fights Its Way Out of the Abyss

Back Yard Burgers sign

Back Yard Burgers, a franchise chain with 55 outlets in 11 states, mostly in the southeast, has done well to make it to the 30-year mark, but it has been a difficult path. It filed for Chapter 11 in October 2012, and it once numbered 180 restaurants across 22 states.

Despite that, Axum Capital Partners, a small private equity firm, had enough faith in the burger chain’s future to acquire a controlling interest in July, and CEO David McDougall, who joined the company while it was in bankruptcy in January 2013 with a mandate to improve things within months, is still there four years later.

One of the first industry vets to see potential in the then-battered brand was David McDougall. “I came on board with Back Yard Burgers in January 2013. The company at the time was in bankruptcy. Sometimes people asked me, ‘Why would you step into a role like this?’” he says with a laugh.

Indeed, Back Yard Burgers was perhaps at its lowest point just ahead of McDougall’s arrival. Dozens of locations were shuttering, the C-suite was peppered with assault allegations, and fan favorites like the seasoned fries had been cut from the menu. When the brand did file for Chapter 11 in October 2012, its total assets were about $13 million and its liabilities roughly $62 million (the vast majority of which were unsecured claims).

…Although the then-new CEO had an illustrious career in foodservice, including years at Cinnabon, NextCen (Marble Slab, Great American Cookie), and finance-cum-franchise consultancy FranIntel, the new owners gave him about six months to show progress. — Nicole Duncan, QSR

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