Village Inn Restaurant franchisee files Chapter 11 bankruptcy
The franchise dining sector has faced a challenging year, as several franchisees have filed for bankruptcy protection to restructure debts, sell locations, and, in some cases, close down underperforming restaurants that they can't sell.
Much of the problem comes from rising costs of labor and food products that are passed on to customers, who have begun to balk at dining out because of higher menu prices.
"High-wage states/markets are amongst the hardest in the restaurant industry," Michael J. Ingram, vice president and principal at National Franchise Sales told TheStreet's Kirk O'Neil in an email.
"Franchisees can only raise their menu prices so far to make up for higher expenses, but as they lose customers, it becomes an uphill battle to cover debt they already have in place along with overall higher expenses," Ingram said.
A franchisee of iconic breakfast restaurant chainVillage Inn has filed for Chapter 11 bankruptcy protection on behalf of three Florida locations, as the restaurant operator's revenue has fallen significantly over the last two years.
Village Inn franchisee files bankruptcy
The 68-year-old restaurant chain's franchisee filed its petitions for Village Inn locations in Land O Lakes, Brandon, and Zephyrhills, Fla., in the U.S. Bankruptcy Court for the Middle District of Florida on June 10, according to BKAlerts.
The St. Petersburg, Fla.-based lead debtor VI Land O Lakes LLC listed over $85,000 in assets and over $234,000 in liabilities in its petitions filed on June 10, according to court papers.
The debtor's largest unsecured creditors include Florida Department of Revenue, owed $48,000; First Citizen Bank, owed $47,000; US Foods, owed $41,000; Sysco Food Service, owed $35,000, and the Internal Revenue Service, owed $29,000, court papers said.
The debtor did not give a specific reason for filing for bankruptcy in its petition.
Florida locations are operating
A manager of the Land O Lakes Village Inn location told TheStreet that all three locations in the bankruptcy are operating as normal with no plans for closures.
The franchisee managing member Lloyd Lehan IV did not respond to a request for comment.
The debtor's three Village Inn locations have faced declining revenues over the last two years, dropping from about $2.02 million in 2024 to $1.9 million in 2025 for a 3.45% decline. Revenue is on pace this year for another decline as the company reported over $658,000 earned through June 10, according to the petition.
Hurricanes disrupted Florida Village Inns
Several Village Inn franchisee locations in the Tampa area have also filed for Chapter 11 protection to resolve financial issues related to hurricanes Helene and Milton in 2024, the Tampa Bay Business Journal reported.
The debtor has not indicated if the hurricanes caused economic issues for its three locations.
Village Inn Restaurants launched in 1958 in Denver and currently has 109 locations in 19 states, according to its website.
Franchisees of chains such as Carl's Jr., Wendy's, Pizza Hut, and Papa John's have all announced recent closings of troubled locations.
Carl's Jr. franchisee divests all locations
Carl's Jr. franchise operator Sun Gir Inc., which filed for Chapter 11 bankruptcy on April 2, is the most recent restaurant operator to announce closings as it will divest all 59 of its restaurants.
The La Palma, Calif.-based franchisee is selling 49 of its locations, mostly in Southern California, and decided to close its remaining 10 stores after failing to find a buyer for the underperforming restaurants, according to the Los Angeles Times.
Bankrupt Village Inn locations:
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This story was originally published June 11, 2026 at 5:41 PM.