One of Moe’s Southwest Grill’s largest franchisees has filed for Chapter 11 bankruptcy and plans to close 16 locations across three states.

Quality Fresca LLC, which operates 38 Moe’s restaurants throughout the Southeast, said it is facing financial challenges caused by rising operating costs, declining sales and broader pressures affecting the restaurant industry. The company currently has Moe’s locations across Florida, South Carolina, Virginia and Washington, D.C., but plans to shut down several restaurants that are no longer financially sustainable.

Quality Fresca is seeking to reject leases and close 16 locations, including 14 in Florida, one in Virginia and one in Georgia, according to court documents filed Tuesday. Quality Fresca previously operated 69 Moe’s restaurants after expanding through acquisitions in 2020 and 2021, but financial challenges forced the franchisee to close 31 locations before filing for bankruptcy.

“Although several of the restaurants have remained profitable, others have been operating at a loss, resulting in the debtor’s inability to meet its obligations and achieve the financial metrics required under various agreements,” chief restructuring officer G. Michael Verdisco said in the docs.

In its bankruptcy petition, Quality Fresca reported between $10 million and $50 million in liabilities and between $1 million and $10 million in assets. The company is also seeking about $1.6 million in debtor-in-possession financing from its parent company, GR Loanco 1 LLC, which would allow it to continue operating while it goes through the restructuring process.

The franchise operator reported nearly $58.9 million in revenue in 2025 and generated $26.3 million in revenue through mid-June. However, the company continued to struggle with debt, including about $16 million in secured obligations.

Court documents also show Quality Fresca defaulted on its franchise agreements in August 2025.

The bankruptcy filing only affects Quality Fresca and does not involve Moe’s Southwest Grill’s parent company, Go To Foods. The Moe’s brand itself is not filing for bankruptcy protection, and other franchise operators are not impacted by the filing.

Through Chapter 11 protection, Quality Fresca will have the opportunity to reorganize its debt, negotiate with creditors and determine which locations can remain profitable. Any restructuring plan will need approval from the bankruptcy court before it can move forward.