Vasari LLC is closing 23 units in three states, including one in New Mexico, three in Oklahoma and 19 in Texas.
“This decision was based solely on what’s best to have a healthy company and ensure the long-term success of our core restaurants for our customers, employees and other stakeholders,” William Spae, Vasari’s president and CEO, said in a prepared statement.
The company continues to operate 45 Dairy Queens employing roughly 700 workers. No decision has been made on whether any of the remaining restaurants will shutter, though some may close within the next 90 days, Nation’s Restaurant News reported.
Vasari added that it plans to remodel and improve any restaurants that remain open.
News of the closures comes after the company filed last week for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas.
Vasari, which has several stores in Texas’ oil patch, said its financials have been hit hard by drops in oil prices over the past few years. Hurricane Harvey also caused damage, closures and inventory losses at several of Vasari’s stores.
In response to Vasari’s filing, Lou Romanus, CEO of the Texas Dairy Queen Operators Council, issued a statement saying the state remains a key market for the Dairy Queen brand.
“Although the franchisee determined that bankruptcy protection was necessary to strengthen its company, Dairy Queen remains a strong brand in our state,” Romanus said. “Texas is home to 130 Dairy Queen franchisees and more than 575 locations – more than any other state in the U.S. – the majority of which will continue to serve your communities.”
Dallas-Fort Worth has been one of the chain’s fastest-growing markets within the state. With more than 100 stores in North Texas, Dairy Queen added six locations in 2016, eight in 2016 and five in 2014.
It plans to continue to grow locally at the same rate in the coming years, according to Mike Mettler, Dairy Queen’s head of development.
“DFW, if you look across the U.S., it’s one of the strongest growth markets in the country as far as employment, population growth and families,” Mettler told the Dallas Business Journal in March. “Dairy Queen is a well-known brand, so it’s a combination of the strength of the brand and the strength of the market. Even though there are a lot of locations in DFW, we need to build more so people can visit stores closer to where they live and work.”
Dairy Queen is a subsidiary of Berkshire Hathaway Inc. and boasted systemwide domestic sales of $3.6 billion for the 2016 fiscal year.