***Official COVID-19 Serious Financial Struggle/Bankruptcy Support Group Thread*** (1 Viewer)

[Politician Spock]

Given we are currently living in what could be the worst financial period any of us experience in our lifetimes, some members of this community will be experiencing financial nightmares. The purpose of this thread is to help them through their nightmares. In order to be of help, certain rules must be followed:

RULES FOR THIS THREAD

Rule 1) Treat others in this thread with the same amount of respect that is required in the suicide thread. Even the consideration of having to file bankruptcy is a very emotional filled thought process, and sharing those thoughts, while beneficial, can be very difficult for one to do. In order to be an effective support group, people need to feel safe to share in this thread. Anything that could possibly make someone regret sharing what they shared is considered a violation of this rule.

Rule 2) Anything shared in this thread stays in this thread. In other words, do not take anything shared in this thread and use it in other threads for any reason. Even an insinuation elsewhere on this site that refers to something posted in this thread is a violation of this rule.

Rule 3) Do not ask for legal advice in this thread. If you need legal advice (and you probably do if you are already considering bankruptcy) then you need to ask those legal questions to a lawyer. If you cannot afford a bankruptcy lawyer, there are service such as Upsolve.org that can provide you access to free or cost effective legal assistance. This is not an endorsement of Upsolve.org. It is simply an example of a service for those who can’t afford bankruptcy attorneys. There are others. Please use them instead of attempting to use this thread in lieu of real legal assistance.

Rule 4) Do not give legal advice in this thread. Being a support group, this may seem impossible to avoid. If you think you’ve crossed the line, or are even in a gray area, please preface your post with “THIS IS NOT LEGAL ADVICE. PLEASE SPEAK TO A LAWYER BEFORE ACTING ON ANY SUGGESTIONS IN THIS POST!”

Rule 5) Do not assume anything you read in this thread is legal advice.

Rule 6) Keep politics out of this thread. This should be assumed given this thread is in the Free For All forum. However, what is considered political in this thread will be determined by a wide interpretation of what is political. For example, while sharing your personal opinion of whether or not a person should be able to file bankruptcy would likely not be considered political in another thread in the Free For All, it IS without any doubt considered political in this thread. It is also considered political to post any opinion of who or what is to blame for COVID-19 bankruptcies.  This thread is for supporting those who are struggling with the possibility of having to file bankruptcy during this historic period of time that we are in, and not for sharing your opinion about bankruptcy. The use of "COVID-19" in the thread title is simply an acknowledgment that this current period in our nation's history is defined by the pandemic, and is not endorsing the belief that political decisions did not lead to more bankruptcies than the pandemic would have caused on its own. 

Rule 7) Do your best to avoid arguments in this thread. Disagreement is allowed but will be given a short leash. It’s okay for a person struggling with bankruptcy to get opinions that disagree, but reading two people argue back and forth about who is right and who is wrong does not help the person who needs help.

Question: How are the thread rules enforced? Reporting a post will result in a site moderator applying the site rules to the post in question, just like in any other thread. However, while the moderator may be familiar with the rules of the this thread, do not assume they are. We cannot expect them to be enforcing different sets of rules for different threads throughout the site. So unless a post has violated a site rule, reporting a post in this thread will likely not produce the outcome you were hoping for in regards to the thread rules above. To get a thread rule above enforced, please PM a Thread Ombudsman. A thread ombudsman is appointed by the site moderators as someone familiar with and willing to enforce the thread rules. While you may receive warnings and have your posts reported by them, Thread Ombudsmen do NOT have any power to punish your site account. The only power a thread ombudsman has is to share their opinion of your compliance/non-compliance of the thread rules to the site moderators. The site moderators can reject a thread ombudsman's opinion, and may even ask other thread ombudsmen to share their opinion as well before taking any action. Any power to take action on your site account due to a rule violation of this thread is 100% held by the site moderators and will reflect the same standards they use for the site rules. The ombudsman process is simply to reduce the burden on site moderators of having to have detailed knowledge of specific thread rules such as this thread needs. If you think you'll be treated unfairly by a current thread ombudsman, then you can either take a chance that the site moderators will ignore the opinion of the thread ombudsman when they report you, or simply avoid posting in this thread. 

Current Thread Ombudsmen (appointed and removed by site moderators):

@Politician Spock

 

[Joe Bryant]

Thanks @Politician Spock  

Hopefully this will be helpful to folks.

As he said, please use extreme care and understand most folks posting here are dealing with heavy stuff. I always want us to be excellent to each other. Please be extra excellent to each other here. 

 

[Politician Spock]

To get things started, I'll share my situation.

My wife and I will be filing for bankruptcy soon. It is because we will not be reopening our business despite the state allowing us to this week.

For you to understand how devastated me, my wife and family are, in 2019 due to overwhelming demand that we franchise our business, we worked with investors to form a franchising company of our business model, after four different consulting companies were in a bidding war to land us as an account, and all four were telling us that growth to 500 to 1000 locations in 10 to 15 years was very realistic, and our exit strategy would be to sell to a larger company at that time for around $40 million. 

And now it's gone. All of it. Why? Because the model we used won't work in the post-pandemic world. It was a self-serve food service operation. In fact, even despite being allowed to reopen this week, we would be required to somehow switch to full-service. Self-serve food service is not allowed. In fact, it's questionable if it ever will be again, or to what degree it will be allowed.

As an example of what we are talking about, Garden Fresh, the parent company of the buffet brands Sweet Tomatoes and Souplantation just filed bankruptcy, is closing all it's locations and is liquidating. From: https://www.restaurantbusinessonline.com/financing/owner-souplantation-sweet-tomatoes-files-chapter-7-bankruptcy

Executives said they saw no proper strategy for reopening as federal regulations forbid self-service operations such as salad bars.

“Given FDA regulations, we don’t think we could reopen any time this year,” CEO John Haywood told Restaurant Business last week.

Buffet brands, in particular, face a brutal challenge as states start easing restrictions on dine-in service.

Federal COVID-19 guidelines call for prohibiting self-service options such as beverage stations, salad bars and buffets. Most states that are allowing restaurants to start serving dine-in customers again are following those regulations.

What’s more, many believe concerns about buffets overall could persist long after regulations are lifted.

Some companies are opting for alternatives. Golden Corral, the nation’s largest buffet chain, has been reopening many of its restaurants in the past two weeks with mostly cafeteria-style service in which employees serve the food.

Pizza buffet chain Pizza Inn, meanwhile, is either using a cafeteria-style model or customers are served pizzas at their tables.

Haywood, however, said the company saw no such option that worked well with its business model.

“The magic of our concept is people being able to customize and control their own experience,” he said. “To convert it into basically a table service restaurant doesn’t work. Even if we serve people behind the buffet, it doesn’t work. People congregate. You’re serving them. We didn’t see a viable way with the regulations to reopen.”

It is possible for us to modify our business model, but like is said in the article above, there are a ton of challenges with that. First off, it would mean the franchising is at best, completely paused, as we can't franchise a new model that we haven't even tested yet, let alone the fact that no one is looking to buy a franchise for the foreseeable future.

Second, this is probably the worst economy in history to try a new business model. 

Thirdly, our current location has significantly changed in the past four years since we opened. It was a good location when we opened, but significant changes to the businesses around us have had a drastic impact on our sales. It's no longer a good location. In fact, it's pretty bad now. It had actually deteriorated to the point where we wondered if we could even turn a profit in 2020. And then the pandemic hit. The reopening of the economy is not going to be kind at all to the businesses around us, as well as us. It was already a dying location before the pandemic. The pandemic is basically the nail in the coffin for this mall we are part of. 

Fourthly, our food service operation is an ice cream concept. Being in Ohio, ice cream businesses make their profit from March to September. Maybe a little in February, and maybe a little in October. But November through January is a definite loss period. The coffers need to be full by October, or else. Losing two months in from mid-March to mid-May is like other businesses losing 4 months. And for us to make a profit in warm months, we rely on lines and crowds of people, which are not allowed. Even in a good location and with a proven business model, it is still questionable that we could earn enough by October to make it through the next winter. 

Fifthly, the investors in our franchising company have pulled out. So even if we get our location profitable despite the challenges above, we are still basically starting over from scratch.  

We could try. Yes, we could give it the old college try.... but the odds are so far stacked against us that it's a fool's errand. We have 3.5 years left on our lease and have a personal guarantee on it. That is around $175K of debt we owe, plus we have loans on the equipment, and because 2019 sales declined due to the decline of the mall, we have credit card debt. 

We've gone from having a $40 million business model to nothing, and having to file bankruptcy. I can't express how devastated we are.

I'm not sharing this to get comments telling me how sorry you are and how you hope for the best.

I'm sharing this for those that are currently experiencing their own devastating stories. You are not alone. I can't help you financially, but I can give you real sympathy and empathy because I'm feeling what you are feeling too. I may be able to answer some questions you have because I had them too. And my real hope is, that once people in this forum start sharing their situations, the collective wisdom of this forum will benefit us all at a time when we so desperately need it. 

So please share your situations here so we can all help one another.

Thanks!