Filing Alert: Quality Fresca I Chapter 11

Update (Aug 4, 2026): A comprehensive case summary is now available for the Chapter 11 bankruptcy filing of Quality Fresca I, LLC.

Quality Fresca I, LLC, a Palm Beach, FL-based franchisee of Moe's Southwest Grill restaurants, filed for Chapter 11 protection on Aug. 4 in the U.S. Bankruptcy Court for the Southern District of Florida.

The Debtor attributes the filing to sustained post-pandemic erosion in foot traffic, which cut revenue without proportionate relief from rent, debt service, and other fixed obligations, compounded by rising shipping and food costs, reduced labor availability, and inflation. Continued cost pressure and competition drove EBITDA lower in 2025, and while part of the portfolio remained profitable, other locations operated at a loss, leaving the Debtor unable to meet its obligations or satisfy the financial metrics required under various of its agreements. For FY 2025, the Debtor recorded net sales of $58.9 million against negative consolidated EBITDA of $111,204, and its Dec. 31, 2025 balance sheet showed roughly $44 million in assets against roughly $52 million in liabilities. Through June 15, 2026, year-to-date revenue was $26.4 million, with EBITDA of $315,254 and store-level EBITDA of $1.1 million.

Prepetition deleveraging and footprint rationalization proceeded along two tracks. On the balance sheet, successive amendments to the Credit Agreement between May 2021 and December 2025 reduced the outstanding balance, though the declaration does not quantify the reduction. On the operating side, the Debtor closed 19 underperforming units over the same period, taking the portfolio from 69 restaurants to 50 as of Dec. 31, 2025; 12 subsequent closures leave 38 Restaurants operating as of the Petition Date.

The Credit Agreement dates to the Debtor's March 2020 acquisition of 67 Moe's locations and originally comprised a $32.5 million term loan, a $4 million development line, and a $500,000 revolver, secured by a first-priority lien on substantially all assets. BBVA USA was the original administrative agent and lender; PNC succeeded to that role in June 2021 and served as the Debtor's sole secured lender and amendment counterparty for the next five years, granting 11 amendments in total — most recently the March 26, 2026 Eleventh Amendment, which extended the Final Maturity Date to April 30, 2026.

PNC exited on or about May 5, 2026, selling and assigning the Credit Agreement and related security agreement to GR Loanco 1 LLC, an affiliate of the Debtor's ultimate parent — moving the senior secured position from a third-party bank into insider hands weeks before the filing. GR Loanco subsequently advanced a $700,000 second-lien loan effective May 6, 2026 and a $100,000 third-lien loan on or about July 31, 2026. The Debtor accordingly enters Chapter 11 with approximately $16 million of secured principal outstanding — approximately $15.2 million of it under the Credit Agreement — entirely held by the affiliated Prepetition Lender, alongside approximately $2.1 million of trade payables owed to landlords, vendors, suppliers, and taxing authorities.

The franchise relationship deteriorated in parallel. Each Restaurant operates under its own franchise agreement with Moe's Franchisor SPV LLC, the brand owner and an affiliate of multi-brand franchisor GoTo Foods, licensing the Moe's name and system in exchange for royalties and advertising contributions; an indirect parent of the Debtor guaranteed certain of those obligations. On Aug. 5, 2025, the Franchisor declared the Debtor in default under all of the agreements, putting the license behind every location at risk. The parties executed Multi-Unit Addendum No. 1 on or about Sept. 4, 2025, deferring certain outstanding and ongoing amounts owed to the Franchisor and its affiliates; the Debtor complied, and the addendum has since expired by its terms. Given negative 2025 results and continued decline into early 2026, management opened negotiations with PNC and GoTo Foods in the first quarter of 2026 over strained liquidity, the closure of underperforming Restaurants, and relief from advertising and royalty fees; those discussions continued in the weeks before the Petition Date and remain ongoing. G. Michael Verdisco, a managing director of Gulf Atlantic Capital Corporation, was appointed CRO on July 9, 2026, reporting to independent manager Joseph J. Luzinski.

The Debtor's stated objective is to exit unprofitable locations, rationalize its lease portfolio and cost structure, and emerge with a smaller, self-sustaining footprint — whether through a reorganization restoring sustainable profitability or a value-maximizing sale. Concurrently with the petition, it moved to reject certain unexpired non-residential real property leases and sought approval of a $1.6 million delayed multi-draw DIP term loan from GR Loanco 1 LLC, the same affiliated lender that holds the prepetition debt, along with authority to use cash collateral. The facility provides an initial $250,000 advance, upsizable to $500,000 with lender consent, priced at 12% cash interest with a 1.5% fee and maturing no later than Feb. 26, 2027; it is secured by priming liens ranking ahead of the lender's own prepetition position. Customary motions address employee wages and benefits for approximately 603 employees, insurance, taxes, critical vendor and PACA/PASA claims, and cash management, along with applications to retain Gulf Atlantic Capital to supply the CRO and additional personnel, Kroll Restructuring Administration as claims and noticing agent, and Jordi Guso and Berger Singerman as counsel. No creditors' committee, trustee, or examiner has been appointed.

Quality Fresca I, LLC reports $1 million to $10 million in assets and $10 million to $50 million in liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 26-20345.

Key Parties

Counsel:

• Jordi Guso
  Berger Singerman LLP
  Email: jguso@bergersingerman.com

Restructuring Advisor / CRO:

• Gulf Atlantic Capital Corporation (G. Michael Verdisco)

Bondoro Insights is continuing to monitor this case and will provide further coverage as appropriate.

Stay informed on every Chapter 11 bankruptcy case with liabilities exceeding $10 million. Subscribe for free to have our coverage delivered directly to your inbox, and explore our full archive of past summaries.

Explore Bondoro Insights for live case dockets and comprehensive coverage of material filings from petition to plan confirmation.