Denny’s franchisee files for bankruptcy as restaurant closures mount

EYM Diner, a major franchise operator for the Denny’s chain, filed for bankruptcy protection in the Northern District of Texas this week. The filing follows a lawsuit from lender InterBank, which claims it is owed more than $18 million and has raised concerns over the deteriorating operational standards at the restaurant sites.

Denny’s corporate leadership stated that they have been working to find new operators for the restaurants for the past two years. Chief Development Officer Mark Burgess noted that while some units are struggling, others remain viable and may be transferred to different franchise partners to secure their future.

Recent data indicates that at least eight Denny’s locations associated with EYM in Texas and Florida have shuttered, with many removed from the company's official store locator. This bankruptcy marks the second time in recent months that a Denny’s franchisee has filed for insolvency, adding pressure to the chain as it operates under new private equity ownership.