Dave's Hot Chicken bankruptcy hits a 7-unit franchisee
TIG Reaper, which runs seven Dave's Hot Chicken restaurants in Pennsylvania, New Jersey and Delaware, filed for Chapter 11 after a dispute with its lender.
A seven-unit Dave's Hot Chicken franchisee has filed for Chapter 11 bankruptcy protection after a dispute with its lender, according to court filings reviewed by trade press this week.
TIG Reaper, which operates Dave's Hot Chicken restaurants in Pennsylvania, New Jersey and Delaware, filed the petition on 21 September in the US Bankruptcy Court for the Eastern District of Pennsylvania. The filing lists between $10 million and $50 million in both assets and liabilities.
The bankruptcy follows a complaint Bank Midwest filed on 8 September in federal court, alleging TIG Reaper had not met certain debt obligations. Court filings name Bank Midwest as the largest listed creditor, owed about $8.8 million.
Chapter 11 buys time; it does not settle who owes whom.
On the same day it filed for bankruptcy, TIG Reaper and three related entities countersued Bank Midwest, alleging breach of contract and seeking at least $14 million in damages, according to the filings.
Franchise system unaffected, chain says
Dave's Hot Chicken, the fast-growing chicken tender chain founded in Los Angeles in 2017, said the financial dispute is between TIG Reaper and its lender and does not involve the broader franchise system, which now counts more than 300 locations.
The chain has expanded rapidly through franchising in recent years, a growth model that has also produced strain at some operators as borrowing costs rose. TIG Reaper became a Dave's Hot Chicken franchisee in 2024.
The case adds to a run of franchisee bankruptcies across the fast-casual sector this year, including Wendy's biggest US franchisee filing for Chapter 11 and a separate filing at a Miami-based operator.
What happens to the seven restaurants
Chapter 11 allows TIG Reaper to keep operating its seven restaurants while it reorganises its debts under court supervision, rather than liquidating outright. The company has not said whether any of the locations will close during the process.
A hearing on the competing claims between TIG Reaper and Bank Midwest has not yet been scheduled, according to the court docket. Dave's Hot Chicken said it continues to monitor the situation but has no further comment on active litigation.
