Dave’s Hot Chicken Operator Files for Chapter 11 Bankruptcy

TIG Reaper Seeks Bankruptcy Protection as Lender Battle Intensifies

A multi-unit Dave’s Hot Chicken franchise operator has entered Chapter 11 bankruptcy protection as a financial dispute with Bank Midwest moves from a lending disagreement into a wider legal battle.

TIG Reaper LLC and three affiliated entities filed for Chapter 11 protection on September 21, 2026, in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. The businesses are part of The Integritty Group, a multi-brand franchise organization with operations across several restaurant and retail concepts.

The bankruptcy is limited to the group’s Dave’s Hot Chicken operations. Other businesses associated with The Integritty Group, including its interests in Qdoba, Checkers, The Greene Turtle, PayMore and Ford’s Garage, are not included in these Chapter 11 cases.

The filing introduces another high-profile example of the financial complexities that can emerge as multi-unit franchise operators expand across brands using debt financing.

Seven Dave’s Hot Chicken Restaurants Included in Filing

The entities involved in the Chapter 11 proceedings currently operate seven Dave’s Hot Chicken restaurants across Pennsylvania, New Jersey and Delaware.

Three additional restaurants are reportedly in advanced stages of development, bringing the overall leased Dave’s portfolio connected to the debtors to 10 locations.

The businesses employ nearly 200 people.

Court filings indicate that the franchisees intend to continue operating their existing restaurants while using Chapter 11 to reorganize their financial obligations.

The operators have also emphasized the importance of maintaining their franchise agreements, vendor relationships, payroll obligations and day-to-day restaurant operations during the restructuring process.

Bank Midwest Dispute Moves Into Bankruptcy Court

At the center of the case is a disagreement between TIG Reaper and Bank Midwest, a division of NBH Bank.

Bank Midwest provided financing to TIG Reaper beginning in 2024. The lending structure included a $1.65 million term loan along with a credit facility that ultimately reached approximately $8.35 million.

The lender later sought to accelerate the debt and pursued the appointment of a receiver.

The franchise operator disputes the lender’s claims.

According to the debtors, their Dave’s Hot Chicken entities were current on payments associated with their financing and should not be responsible for obligations connected to a separate group of businesses affiliated with TIG’s Qdoba operations.

Bank Midwest has taken a different position regarding the scope of its security rights and alleged defaults.

Those competing interpretations are now expected to become a central issue in the bankruptcy litigation.

TIG Files Separate Lawsuit Against Bank Midwest

The Chapter 11 cases were accompanied by an adversary proceeding against Bank Midwest.

TIG’s Dave’s Hot Chicken entities are seeking court declarations regarding their obligations while also pursuing damages tied to the lender’s actions.

The franchise operator alleges that Bank Midwest improperly attempted to connect debt associated with separate Qdoba-related entities to the Dave’s Hot Chicken businesses.

TIG also claims the lender’s actions damaged its ability to complete a potential sale of the Dave’s restaurant portfolio.

Before the dispute escalated, the company says it had received an offer of approximately $30 million for the businesses.

According to the debtor’s account, publicity surrounding the lender action significantly reduced the value potential buyers were willing to offer, with one proposal reportedly dropping by almost half.

Those allegations remain disputed issues that will need to be resolved through the court process.

Bankruptcy Filing Lists Significant Assets and Liabilities

The bankruptcy documents place both assets and liabilities within a range of approximately $10 million to $50 million.

The businesses listed between 100 and 199 creditors.

Bank Midwest represents one of the most significant secured lending relationships associated with the filing.

The debtors had also used merchant cash advance financing before entering Chapter 11.

Court information identifies approximately $305,000 in advances from several providers, including funding tied to future restaurant revenue.

Merchant cash advances can provide quick capital to restaurant operators, but repayment structures based on future sales can create substantial pressure on daily cash flow when companies are already servicing other debt obligations.

Franchisees Plan to Keep Restaurants Operating

The Chapter 11 filing appears structured around maintaining the seven operating Dave’s Hot Chicken restaurants rather than immediately shutting them down.

The franchise operators have requested permission to continue paying essential operating costs, including employees, landlords, utilities, insurance, food vendors and franchise-related obligations.

TIG’s principals are also providing approximately $200,000 in debtor-in-possession financing to support operations during the early stages of the bankruptcy process.

The debtors reported roughly $325,000 in cash, cash in transit and inventory available as cash collateral.

They are also seeking access to approximately $100,000 that they say has been frozen through payment-processing channels connected to DoorDash and Stripe.

Dave’s Hot Chicken Says Broader Franchise System Is Unaffected

Dave’s Hot Chicken corporate has stressed that the dispute is between an independently owned franchise operator and its lender.

The company has indicated that the bankruptcy does not involve Dave’s Hot Chicken corporate or the broader franchise system.

The affected restaurants have continued operating.

That distinction is particularly important given the rapid expansion of Dave’s Hot Chicken.

The concept began as a small Los Angeles operation in 2017 and has since developed into one of the fastest-growing restaurant franchise brands in the fast-casual chicken category.

By 2026, the system had expanded beyond 400 restaurants worldwide.

The brand entered another stage of development after investment firm Roark became involved in 2025, providing additional resources for international and domestic expansion.

Multi-Unit Growth Can Create Complex Financing Structures

The TIG bankruptcy offers a broader lesson for franchise investors and multi-unit operators.

Rapid expansion can create substantial enterprise value, but adding restaurants often requires a combination of bank financing, landlord obligations, development commitments and working capital.

The structure becomes even more complicated when an operator owns businesses across multiple franchise systems.

Cross-default provisions, guarantees, security agreements and shared borrowing arrangements can potentially expose profitable operating companies to financial problems originating elsewhere within a larger organization.

For franchisees pursuing aggressive multi-unit growth, understanding those relationships can be just as important as restaurant-level sales performance.

What Happens Next?

TIG Reaper intends to use Chapter 11 to maintain operations while challenging Bank Midwest’s claims and restructuring its obligations.

The bankruptcy court will ultimately have to address several major issues, including the extent of Bank Midwest’s security interests, the financial obligations of the Dave’s entities and the franchisee’s allegations surrounding the proposed restaurant sale.

For now, the seven operating Dave’s Hot Chicken restaurants remain in business while the financial dispute moves through the bankruptcy system.

The case serves as another reminder that the financial health of an individual franchise operator and the performance of the broader franchise brand are two separate issues—particularly within large franchise systems supported by independently financed multi-unit owners.

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