Toms King, a 90-unit Burger King franchisee that filed for bankruptcy in January, managed to sell the bulk of its stores at a Delaware auction on March 21, according to a court transcript of the proceedings.
The biggest buyer was DC Burger, which successfully bid for 37 of Toms King’s 40 Virginia locations. DC Burger bid $22 million, or about $594,600 per restaurant. This sum per restaurant is roughly 4.2 times the average franchised Burger King’s four-wall EBITDA of $140,000 in 2022. DC Burger is owned by Jessica and Kuljeet Singh, who also operate 80 Round Table Pizza restaurants in the Pacific Northwest, Restaurant Business reports.
Following DC Burger, Karali Group, which operated more than 74 U.K. Burger Kings until October of last year, bid $7.6 million for 27 restaurants in Ohio and Pennsylvania. The per-restaurant price for Karali was about $281,500, or just over 2 times the expected EBITDA for an average Burger King.
Burger King itself bid $3.2 million for 17 restaurants in Illinois, Ohio and Pennsylvania, for a per-restaurant price of about $188,000. Restaurant Concepts bid $120,000 for a single restaurant in Pennsylvania. A total of 82 restaurants were sold, while 88 were on auction.
Burger King has struggled with franchisee bankruptcies and closures this year, with 115-store operator Meridian Restaurants Unlimited filing for Chapter 11 protections in March, and EYM King closing 26 restaurants in Michigan at the end of March, according to Restaurant Business. Poor sales have weighed on Burger King’s franchisees, narrowing margins and making it harder to raise further capital. Slumping restaurant profitability has driven parent company RBI to try a variety of measures to boost sales.
Toms King did not immediately respond to a request for comment.