A Checkers and Rally's franchisee that built a 16-restaurant footprint across four states has filed for Chapter 11 bankruptcy, with its revenue sliding for two straight years and a foreclosure notice hanging over one of its Tennessee restaurants. Global Midsouth Holding Corp., based in Memphis, filed its petition on October 28 in the U.S. Bankruptcy Court for the Western District of Tennessee, and the company was already facing foreclosure proceedings on its restaurant property in Jackson, Tennessee.
According to a report from TheStreet, the Chapter 11 filing is meant to let Global Midsouth reorganize its business rather than liquidate it. The filing also triggered an automatic stay that halts legal actions against the company while the case moves through court. Court filings cited by the New York Post show the company listed $1.9 million in assets against $1.3 million in liabilities, with unsecured creditor debts including $3,400 owed to the Tennessee Department of Revenue and $2,500 owed to Madison County Waste Disposal.
The numbers show a steady decline. Global Midsouth reported revenue of $860,000 in 2024, which dropped to $800,000 in 2025, and the company had taken in only $582,000 through its filing date in 2026, per the same court records cited by the Post. A bankruptcy case listed on PACER Monitor under the name Global Midsouth Corp., filed in the Mississippi Northern Bankruptcy Court with a docket last updated Tuesday, had not been confirmed as the same entity as of this writing.
A Nearly 30-Year Franchisee's Rapid Expansion
The bankruptcy comes despite a recent run of growth for the company's owner, Sedrick Turner, who has operated Checkers and Rally's restaurants for nearly 30 years. Turner expanded his portfolio to 16 locations across Alabama, Missouri, Mississippi, and Tennessee after adding restaurants in Huntsville and Tuscaloosa, Alabama, according to QSR Magazine.
At the time of that expansion, Turner said he has spent over three decades building and leading franchise operations and believes success comes from hands-on leadership, empowering employees, and consistent quality. He added that he aims to improve guest experience, strengthen his team, and serve the surrounding community. Robert Bhagwandat, Checkers Drive-In Restaurants' senior director of franchise development, praised Turner's business acumen at the time, saying in 2024 that Turner is an experienced and driven franchisee committed to people and performance, and that he understands operating restaurants and purposeful growth.
Checkers' Small-Footprint Model Dates to 1986
Checkers Drive-In Restaurants was founded in 1986 and merged with Rally's in 1999, and the chain now operates more than 700 locations across the eastern, midwestern, southeastern, and western United States. The company licenses its brand to independent owner-operators like Turner rather than running every location itself, and the corporate franchisor is not affected by Global Midsouth's bankruptcy filing. The chain's franchise model allows operators to build restaurants on parcels smaller than half an acre, a footprint the Post notes is notably compact compared with rival drive-thru chains.
Global Midsouth is not the only Checkers and Rally's franchisee to land in bankruptcy court this year. C.S. Holdings of Tampa LLC, which operates two Tampa locations, filed for Chapter 11 protection in July in Tampa, Florida. That filing listed more than $1.8 million in debts and more than $569,000 in assets, according to a separate TheStreet report.
Part of a Broader Wave Hitting Franchise Operators
The pressure on Checkers and Rally's operators mirrors a wider reckoning across the franchise world this year. Restaurant Dive counted at least 10 significant multi-unit restaurant franchisee bankruptcy filings in 2026 representing several hundred locations, and one restructuring attorney told the outlet that this year's pace was on track to match or exceed the more than 20 he tallied in 2025.
Restaurant Dive also reported that U.S. business bankruptcy filings rose about 17% year over year through June 30, climbing from roughly 23,000 to nearly 27,000, while food and labor costs have jumped 36% since 2019 even as franchisee margins typically run only 3% to 5% pre-tax. Other burger and chicken chains have been swept up in the same wave: ARC Burger LLC filed for Chapter 7 in April after closing all 77 of its Hardee's locations across nine states in December, Sailormen's 136-unit Popeyes operation in Florida and Georgia filed for Chapter 11 in January, and Friendly Franchisees Corporation, operator of 65 Carl's Jr. locations, filed in April as well.
Meritage Hospitality Group, a Michigan-based company and one of the largest Wendy's franchisees, offers a starker picture of what sustained losses can do. The company began closing stores in the fourth quarter of 2025 and had shuttered about 60 underperforming stores before announcing a September bankruptcy filing alongside plans to close at least 20 more locations. Meritage deleted 33 restaurants from its portfolio in September and October combined, bringing its total losses to roughly 93 locations since 2025, even as it continues operating 314 Wendy's restaurants, one Bojangles, and five independent concepts, per Restaurant Dive.
Meritage's financials illustrate the same downward pressure facing Global Midsouth. Its revenue fell 7.6% to $618 million in 2025 from about $669 million in 2024, then dropped another 14% to $274 million in the first half of 2026 compared with $318 million a year earlier. Same-store sales at Meritage declined 7.2% in 2025 and 8.3% in the first half of this year, the outlet reported.
