Since May 2020, at least three mechanics lien claims have been filed against a 49-unit IHOP franchise owner named CFRA Holdings for restaurants located in Spartanburg, SC and Johnson City, TN. The lien claims total $123K in unpaid construction work as of July 2020.
Two different subcontractors contractors have filed the three liens against CRFA, LLC, the hiring party and an affiliate of CFRA Holdings based in Clearwater, FL.
One mechanics lien claim was processed with the Spartanburg County clerk’s office in South Carolina, and two were processed with the Washington County clerk’s office in Tennessee.
According to reports, CFRA Holdings has filed for Chapter 11 bankruptcy as of May 2020.
Two Contractors Owed a Combined $123K on IHOP Projects
The two contractors are allegedly owed a total of $123,366.93 for work taking place at IHOP’s located at 8135 Warren H Abernathy Hwy, Spartanburg, South Carolina, and at 3214 Peoples St, Johnson City, Tennessee.
Subcontractor Smart Vision Construction, LLC filed the largest claim to date at $92,350 in unpaid construction work, which was placed on the Johnson City location. The claim was processed back on May 7, 2020.
Hilton Displays, LLC filed the other two liens against CRFA Holdings, with one lien placed in Spartanburg and one in Johnson City.
On June 26, 2020, Hilton Displays filed their first lien on the IHOP location in Spartanburg, SC. The claim was valued at $14,754.29.
The Johnson City lien filed by Hilton Displays, recorded on July 1, 2020, is valued at $16,262.64.
CFRA Holdings Files for Bankruptcy in May 2020
As reported by FSR Magazine, CRFA Holdings filed for Chapter 11 bankruptcy on May 6, 2020.
The FSR Magazine report found that CRFA Holdings cited the coronavirus pandemic as a primary cause.
Aside from South Carolina and Tennessee, CRFA Holdings also operates in North Carolina and Virginia.
FSR Magazine also found that CRFA Holdings faces $22.8 million in unsecured debt. As of March 31, 2020, FSR Magazine reported that 1,362 domestic IHOP locations were still operating while 347 were shut down amid the COVID-19 outbreak.
By the end of Q1, IHOP experienced a decline of 14.7% in same-store sales.
Minimum Wage Law Violations Against CFRA Holdings From 2015
Back in 2015, CRFA Holdings was in the midst of a lawsuit with the United States District Court for the Middle District of North Carolina for allegedly violating minimum wage laws outlined under the Fair Labor Standards Act of 1938.
On February 5, 2018, the case was dismissed and settled in the amount of $1,725,000, according to court documents.
Restaurant Industry Suffers During Coronavirus Pandemic
Other powerhouse restaurant chains, such as Bamboo Sushi, Ruby Tuesday, Boston Market, Panera Bread, and additional parent companies have been hit with high-dollar mechanics lien claims amid potential bankruptcy.
As of April 2020, contractors in Arizona and California placed $1.6M liens on Bamboo Sushi restaurants. By May 12, 2020, Bamboo Sushi’s parent company, Sustainable Restaurants Group, filed for Chapter 11 bankruptcy.
CraftWork Holdings, the parent company of Logan’s Roadhouse and Old Chicago Pizza & Taproom, was also cleared by a bankruptcy court in May 2020.