Matador Restaurant Group, a Del Taco franchisee operating 22 outlets, has recently declared bankruptcy due to financial struggles. The South Carolina-based company reported assets and liabilities each between $1m and $10m, with over $2.7m in merchant cash advance (MCA) debts.
The owner of Matador, Red Door Brands, also manages other food chains such as Little Caesars and Arby’s. However, these chains have not faced similar financial issues and will undergo separate bankruptcy proceedings, as reported by RestaurantBusinessOnline.
The root of Matador’s financial problems can be traced back to the Del Taco operations and the MCA financing. Court documents reveal that the Del Taco restaurants began experiencing difficulties in late 2024 due to company growth, a sudden decline in sales, and rising operational costs.
In an attempt to address cash flow issues, the company turned to MCA financing based on the advice of its brokers. However, MCA providers have recently intensified their collection efforts, complicating the brand’s operations. Several creditors have asserted their interests through UCC-1 financing statements, with one even placing a lien on the company’s accounts.
To halt these collection efforts and facilitate reorganization, Matador filed for bankruptcy in order to protect the business and its assets. This move aims to provide the company with the necessary breathing room to restructure and overcome its financial challenges.
In other news related to Del Taco, the chain recently signed an agreement to open ten outlets in Indiana in February 2025. However, the following month, Del Taco abruptly closed almost all of its restaurants in Colorado, US, with franchisee Newport Ventures citing bankruptcy proceedings as the reason for the closures.
Despite these setbacks, Del Taco remains committed to expansion, as evidenced by its plans to enter the Louisville, Kentucky market through a five-store development deal with new franchisee Karan Pandher. This move marks a significant step for the chain as it seeks to grow and thrive in new markets.
“Matador Restaurant Group files for bankruptcy” was originally reported by Verdict Food Service, a GlobalData owned brand.
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