NEW YORK In a rare case of a bankruptcy by a McDonald's franchisee, a seven-unit operator in Brooklyn will give up ownership of the restaurants and leave the system after federal court-supervised bids ranging from $600,000 to $1.6 million were received for his outlets, the Wall Street Journal reported Thursday.
Franchisor McDonald's Corp. of Oak Brook, Ill., reportedly exercised its rights of first refusal on four of the locations and would at least temporarily own them, pending finalization of the debtor-in-possession proceedings.
The Journal quoted an attorney involved in the Chapter 11 filing by Greenwich, Conn.-based franchisee Richard Yandoli as calling the matter a "classic case" of business failure due to undercapitalization.
Yandoli Foods Inc., a McDonald's franchisee since 1990, reportedly listed among its creditors the franchisor and two firms that provide financing to its operators, Golden Management Acceptance Co. and Golden Improvement Co.