Craft Beer Focused Eatery Files Bankruptcy- Will Texas Lose Its 5 Locations?

World of Beer, which has five locations in Texas (Fort Worth, Lubbock, The Colony, Katy, and Cypress) has filed for Chapter 11 Bankruptcy.

It follows other chains like Buca di Beppo and Red Lobster in what has been a challenging economic year for restaurants.

World of Beer is a casual-style restaurant that focuses on craft beer- with hundreds of selections at each store. The menu is intended to pair with these brews.

While there is no current word yet on which, if any, of the remaining World of Beer locations will close, World of Beer has already closed 14 locations (8 company-owned / 6 franchises) in the past 12 months.

Those closures did include Texas locations in Fort Worth and College Station, as mentioned in the Chapter 11 filing.

WOB cited poor management by franchisees as part of the issues faced by the restaurant:

Unfortunately, many franchisees chose to get in on the craft beer explosion without having sufficient experience in the industry and then operated their franchise as a passive / secondary business.

In other words, it appears that some franchisees were not present or capable enough and tarnished the brand. Or at least that's how I read that statement.

The bankruptcy filing also put the blame on the continued fallout of COVID-19:

While successful in securing PPP funding, which helped support the Debtors’ employees, investors and business considerably, the food and beverage market did not rebound soon enough.

It is entirely possible that through smart restructuring WOB can rebound after this bankruptcy filing and not close any more locations.

However, with a company-owned/ franchised model, it's possible that any combination of those two store types could close this year or soon thereafter.