A Firehouse Subs franchisee operating eleven locations across Utah and Idaho filed for Chapter 11 bankruptcy on March 23, listing as much as $10 million in liabilities against just $100,000 in assets, a gap that tells you everything about the financial squeeze hitting mid-tier restaurant operators right now.
CN Holdings LLC, based in Idaho Falls, Idaho, filed its petition in the U.S. Bankruptcy Court for the District of Utah in Salt Lake City. The company is owned by Chris Morris and Natalie Bosworth, formerly married, who told bankruptcy reporters they plan to reorganize around their profitable restaurants and sell off the ones that aren't working.
One Utah location has already closed. The rest hang in the balance as the franchisee tries to dig out from roughly $2.3 million in debt, a hole created, the filing indicates, by construction delays on two new units and sales that fell well short of projections once those restaurants finally opened.
The story follows a pattern familiar to anyone watching the restaurant franchise sector. An operator bets on expansion. Construction runs late. Costs pile up. When the doors finally open, customers don't show up in the numbers the business plan assumed. The debt doesn't wait.
CN Holdings' petition laid bare the math: up to $100,000 in assets on one side, between $1 million and $10 million in liabilities on the other. That kind of imbalance doesn't leave much room for optimism, though Chapter 11 is designed to give businesses breathing space to restructure rather than liquidate outright. Whether Morris and Bosworth can thread that needle remains an open question.
The filing did not specify which Utah location shut down or which unprofitable stores are on the block for sale. Nor did it detail the timeline of the construction delays that apparently triggered the financial spiral.
Firehouse Subs itself is a Jacksonville, Florida-based chain founded in 1994 by former firefighters Chris Sorenson and Robin Sorenson. The brand has grown to roughly 1,450 locations nationwide. In November 2021, Restaurant Brands International, the parent company behind Burger King, Popeyes, and Tim Hortons, acquired Firehouse Restaurant Group Inc. for $1 billion in an all-cash deal.
That billion-dollar acquisition signaled corporate confidence in the brand. But corporate confidence and franchisee profitability are two very different things. The person writing the check from headquarters and the person signing the lease in a strip mall outside Boise occupy different economic universes. CN Holdings' bankruptcy is a reminder that a strong brand name doesn't insulate the operators on the ground from the real costs of labor, rent, construction, and soft consumer demand.
This is not an isolated case. The restaurant franchise sector has seen a string of Chapter 11 filings in recent months, a trend that should worry anyone who believes small and mid-size business operators are the backbone of the American economy. A Domino's franchisee in San Diego recently sought Chapter 11 protection, and a major Popeyes operator put 130 locations at risk through its own bankruptcy proceedings.
Just two months before CN Holdings filed, another sandwich-chain franchisee hit the wall. MTF Enterprises LLC, which operated 43 Subway restaurants across Maine, New Hampshire, Pennsylvania, and Virginia, filed for Chapter 11 bankruptcy protection on January 21, 2026, in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. Restaurant Dive reported that MTF Enterprises allegedly defaulted on cash advance loans from merchant cash advance lenders, resulting in a lien on its sales.
Subway remains the largest restaurant chain in the United States by unit count, with 16,177 locations, more than McDonald's at 13,786 and Starbucks at 13,502, according to StatsPanda. But sheer scale doesn't protect individual franchisees from the financial vise of rising costs, tight margins, and debt obligations that outpace revenue.
The MTF Enterprises case is instructive. Merchant cash advance loans, short-term, high-cost financing products, have become a lifeline for franchisees who can't secure traditional bank credit. When those loans go bad, the lender can claim a piece of every sale until the debt is repaid. That's not a recipe for staying in business.
CN Holdings' filing fits into a wider picture of financial distress across the restaurant industry. From Abuelo's Mexican Restaurant closing 24 locations after its own bankruptcy filing to Salt and Lime Modern Mexican Grill seeking Chapter 11 protection in Arizona, the pattern is consistent: operators who expanded during a period of cheap money and pandemic-era demand are now colliding with a harsher reality.
Construction costs have climbed. Consumer spending has softened in many markets. And the franchise model itself, which shifts much of the financial risk onto individual operators while the parent brand collects royalties, can leave those operators exposed when conditions turn.
Restaurant Brands International paid $1 billion for Firehouse Subs in 2021. That transaction enriched the founders and the corporate entity. CN Holdings, meanwhile, is now in federal bankruptcy court trying to figure out which of its eleven locations can survive. The gap between those two realities is the gap between corporate dealmaking and street-level economics.
The alarming rise in small business failures across multiple sectors suggests this is not just a restaurant problem. It is an economic environment problem. Franchisees, small retailers, and independent operators are absorbing the consequences of years of easy-money expansion followed by a sharp correction in costs and demand.
Chapter 11 is not a death sentence. It is a legal framework for reorganization, a chance to shed unprofitable obligations, renegotiate leases, and emerge as a leaner operation. But the numbers CN Holdings disclosed in its petition suggest the climb will be steep. A company with up to $100,000 in assets facing up to $10 million in liabilities doesn't have much margin for error in a restructuring plan.
Morris and Bosworth intend to keep their profitable locations running while offloading the rest. That's the textbook Chapter 11 play. Whether the bankruptcy court approves a plan that makes the math work, and whether Firehouse Subs as a franchisor cooperates with the restructuring, are questions the filing itself doesn't answer.
The case number for the filing was not publicly disclosed in initial reporting. The specific restructuring terms and any motions filed alongside the petition also remain unclear. What is clear is that another franchise operator has been forced to admit, in a federal courthouse, that the business plan didn't survive contact with reality.
When the corporate parent cashes a billion-dollar check and the local operator lands in bankruptcy court five years later, the system is working exactly as designed, just not for the people taking the risk.