Beloved fast food chain enters a bankruptcy death spiral

Starting a fast-food chain from scratch rarely works, at least on a national level. It's an incredibly crowded space and there's a massive leap from creating a successful proof-of-concept single restaurant to scaling the eatery in a meaningful way.

That's why many of today's most successful chains had help from established national leaders. Chipotle, for example, once counted McDonald's as a major investor. That company managed to thrive and become a global player after the burger chain sold its interest in the Mexican fast-casual chain back in 2006.

At roughly the same time McDonald's also sold the Boston Market chain. The burger giant had actually bought the former Boston Chicken in 2000 for its real estate holdings, but it opted to try to grow the brand before selling it to a private equity firm in 2007.

Boston Market, which started in Newton, Mass. — a Boston suburb — in the ensuing years became a national brand growing to over 1,200 locations. In recent years that has slipped to 300 and that number is falling every day. Now, the chain's owner, Jignesh Pandya, has personally filed for bankruptcy protection. That leaves the future of the chain very much in doubt as stores have been getting evicted and both employees and vendors have not been paid.

Boston Market appears to be nearing the end
While Pandya's personal bankruptcy does not necessarily mean the end for Boston Market, the chain's inability to pay its bills may make any formal financial proceedings irrelevant. The company has already had its headquarters seized in May by the Colorado Department of Revenue over $329,00 in unpaid sales and payroll taxes.

Chains without a central authority tend to decline quickly and that has been happening with Boston Market as stores have been rapidly closing. In recent weeks all of the company's Connecticut and South Florida restaurants shut down abruptly.

In many cases, the closures are happening due to formal evictions based on unpaid rent.

Boston Market also faces a lawsuit from one of its key vendors, US Foods, which claims that it's owed more than $11 million.

The chain also faces a federal investigation over claims of unpaid wages.

"The investigations come amid a host of complaints against the chain from vendors and employees over late or unpaid bills. The company has been sued more than 140 times in various state and federal courts, mostly over unpaid bills, since current ownership took ownership in 2020," Restaurant Business Online reported.

What's next for Boston Market
While the chain has not filed for bankruptcy its future likely is tied to Pandya's personal filings. In theory, the brand itself has some value and a new owner, perhaps one of the companies it owes money to could attempt to keep the brand alive. It's also possible that by the time a bankruptcy court makes those decisions, that the dwindling number of locations that remain may have already shut down.

A restaurant chain that does not pay its rent or its food vendor bills cannot operate.

Likely, the remaining Boston Market restaurants will not be able to continue to stay open simply because they won't have product to sell. In theory, the bankruptcy court could allow for workers to get paid and deals can be made with suppliers, but the sheer volume of lawsuits and complaints make that happening quickly very unlikely.

The chain's LinkedIn page still links to job postings and makes no mention of its troubles. Boston Market does not accept direct messages on social media and does not offer media contact information in a readily discoverable place on its website.