Amid expansion plans, popular Al’s Burger Shack files for bankruptcy
A beloved chain of burger joints filed for bankruptcy this month.
Chapel Hill’s Al’s Burger Shack filed for Chapter 11 bankruptcy last week in North Carolina’s Middle District Bankruptcy Court. The filing was first reported online by the Triangle Business Journal.
Owned by husband and wife Al and Melody Bowers, Al’s Burger Shack filed for bankruptcy protection for all three of its locations.
Named as AJEM Hospitality in the filings, the original Franklin Street location claims less than $50,000 in assets, but between $500,000 and $1 million in liabilities. The largest debt is $250,000 in payroll taxes owed to the IRS.
The Southern Village location claims similar assets and liabilities, and the Governors Village location claims less than $50,000 in assets and between $100,000 and $500,000 in liabilities.
In an emailed statement, Al’s Burger Shack said all restaurants would remain open while the company’s debts are restructured, attributing the bankruptcy to the quick expansion.
“While sales are strong at our three locations, we overextended during expansion and need protection and relief while we reorganize,” the statement said. “We appreciate your support and patronage and will need to keep public comments to a minimum. As grateful as we were to receive accolades in recent years, we are even more so to have been afforded this opportunity to regroup. Rest assured we have absolutely no plans to stop slinging burgers and hope to see you at Al’s soon.”
Attorney John Paul Cournoyer is representing Al’s Burger Shack in the bankruptcy filings and said high-interest loans are weighing on the company.
“The restaurants are strong businesses and if it were not for these loans the companies would be healthy,” Cournoyer said in an email. “This is precisely the type of problem that Chapter 11 bankruptcy is designed to fix. I feel confident in our ability to successfully reorganize and that Al’s Burger Shack will be around for years to come.”
Al’s Burger Shack has been locally popular for years, but caught national attention in 2018 when a Trip Advisor list named the restaurant’s Bobo Chili Cheese burger the best in America.
The first shack was opened on Franklin Street in 2013, with additional locations opened in Chapel Hill’s Southern Village and Governor’s Village developments.
The bankruptcy filing came days before plans were announced to build a fourth Al’s location, this time in Durham’s Rockwood Shopping Center in partnership with bottle shop and bar Beer Study.
Co-owner of Beer Study, AJ Ragosta, said their plans to bring Al’s to Durham are unaffected by the bankruptcy.
“Unlike the other Al’s locations, (Beer Study) are primary owners and financiers of this expansion,” Ragosta said in a text message. “We are working with Al for his expertise, vendor relationships and acumen in hiring and managing the quality people needed to run a strong food program. Not to mention, there is no arguing that he makes a mean burger.”
This story was originally published January 6, 2020 at 2:39 PM.
