Chicken Out Rotisserie Seeks to Trim Financial Fat

Bankruptcy lawyers have taken executives at Chicken Out Rotisserie by the hand to lead them over to whatever side of the road will make the chain’s 10 remaining restaurants profitable again.

The company behind the fast-food variant, formally named Chicken Out Inc., filed for Chapter 11 protection Thursday with plans to continue slow-roasting its signature birds—much embraced by the Washingtonian palate—while company executives sort through its drained financial state. The restaurant locations attract both starving customers looking for quick bites and frazzled parents in search of something to feed their families.

Chicken Out attorney Jeffrey Orenstein said that the restaurant chain increasingly lost money as financial hardship spread among its customers who dared to cook their own roasts at home. But the real trouble hit last winter when a series of snowstorms buried its suburbanite Washington, D.C., clientele and their fleet of minivans under a paralyzing blanket of snow.

For days, it was impossible for anyone to cross the road.

“For anyone who was in retail or hospitality business, if they didn’t have an overly healthy outlook at that time, the snow really put a huge dent in all of those businesses,” Orenstein said. “We’ve seen that with a lot of our clients in the restaurant industry, with clothing [stores]—even auto repair.”

One rotisserie-style chicken a la carte costs $10.99, according to Chicken Out’s website. Throw in a side of mashed sweet potatoes, chunky cinnamon applesauce and apple cornbread stuffing to make it a meal.

Orenstein said the chain has already closed its most unprofitable locations. Bankruptcy court’s usual tools—the ability to get out of long-term leases on empty stores, break contracts that drain from company profits and pitch a repayment plan to creditors—will help the company, ahem, trim some of the fat from its balance sheets.

According to the company’s petition filed in U.S. Bankruptcy Court in Greenbelt, Md., the business owes between $10 million and $50 million in debt but has assets worth less than $10 million. Orenstein declined to give more specific amounts.

The company’s corporate offices are located in Gaithersburg, Md. It employs 160 people overall.