Dairy Queen Rival Bankruptcy Explained: Locations, Gift Cards, and Future Plans
By Maya Lin-Takahashi
The crisis at M&M Custard LLC illustrates a broader trend shaking restaurant franchise networks. During the low-interest-rate environment between 2017 and 2021, multi-unit franchise operators borrowed aggressively to build new drive-thru locations. Construction costs per square foot averaged historic highs, and operators routinely signed triple-net (NNN) leases with aggressive annual rent escalation clauses.
When interest rates surged alongside equipment financing charges, operators were left with high fixed debt service. Concurrently, consumers pushed back against restaurant price increases. Value-conscious families began curtailing discretionary fast-casual visits, creating a sharp traffic decline that left debt-laden franchisees unable to cover fixed expenses.
Restructuring professionals expect more multi-unit operators to use Chapter 11 filings to renegotiate leases and downsize debt obligations. Store liquidation becomes a tool to carve away failing units so profitable locations can survive.
Maya is a hardware enthusiast who tests and reviews smart home devices, smartphones, wearables, and audio gear. She focuses on practical consumer value and build quality.
