Maybe you haven’t heard of Franchise Group Inc. (FRG), but it owns Vitamin Shoppe and several other retailers. The company recently declared bankruptcy due to heavy losses and rising debt levels.

The company announced a plan to restructure its finances by working with those holding about 80% of its massive debt. This plan aims to strengthen the company’s financial position and help its core brands (Pet Supplies Plus, The Vitamin Shoppe and Buddy’s Home Furnishings) overcome financial challenges and grow.

The restructuring plan involves converting the company’s debt into ownership shares; This will significantly reduce your debt and improve your financial health. This change is intended to benefit both brands and stakeholders.

To carry out this plan, FRG and its businesses initiated voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court in Delaware. However, franchise locations of FRG brands are not included in this process.

$250 million financing

As part of the restructuring, the company secured $250 million in financing to maintain operations and meet commitments to employees, customers, vendors and franchise partners. This financing is subject to court approval.

FRG President and CEO Andrew Laurence said this move is vital to the growth of businesses that will continue normal operations during the bankruptcy process.

FRG also announced that it would shut down American Freight due to ongoing economic difficulties. Store closing discounts will begin on November 5, both in stores and online.

The company is petitioning the court to ensure the continued normal business operations of Pet Supplies Plus, The Vitamin Shoppe, Buddy’s Home Furnishings and FRG. The company said these demands included demands to continue paying employees and maintaining customer programs.

Mark HuffmanCorrespondent

Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices, the economy, and reports extensively on negative option sales. He was previously an Associated Press reporter and editor in Washington, D.C., and a reporter for Westwood One Radio Networks and Marketwatch.

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