(Gray News) – Gigi’s Cupcakes, a chain bakery with dozens of locations primarily in the Midwest and Southeast, is filing for bankruptcy.
Nation’s Restaurant News, a trade publication, reported that Gigi’s is filing in conjunction with Sovrano, a company that owns Gatti’s Pizza. Both were associated with private equity group FundCorp.
Gigi’s Facebook account has not yet acknowledged the bankruptcy reorganization filing.
Nation’s Restaurant News reported that Gigi’s listed liabilities in its filing between $1 million and $10 million.
The filing was made last week in a bankruptcy court in Texas, where Gigi’s moved its corporate offices in 2016.
The company has recently been notably associated with former NFL linebacker Brian Orakpo, who opened a Gigi’s franchise with a teammate after retiring.
Orakpo and the teammate, Michael Griffin, have been featured in a Microsoft commercial currently airing.
According to QSR magazine, a trade publication, Gigi’s bankruptcy filing is linked to a more than $9 million loan that it hasn’t repaid.
A group of franchise owners is also suing the operators of Gigi’s over price raises the private equity group instituted after taking over.
A lawyer representing that consortium, Jeffrey Cohen, told QSR that the bankruptcy “proves that my clients who are suing Gigi’s Cupcakes for misrepresenting the financial performance of the company were correct.”
Cohen told Franchise Times he believes the private equity operators “sucked the money out of the companies and they put them into bankruptcy.”
It’s unclear how the bankruptcy will affect day-to-day operations at stores.