Sbarro Israel is already operating under a stay of proceedings and has closed several outlets.
Sbarro Inc. is preparing to file for Chapter 11 bankruptcy protection on Monday in the US, due to $365 million in debt, which places the Italian fast food chain's Israeli franchises in doubt.
Sbarro Israel is already operating under a stay of proceedings following the collapse of Gold Brands Ltd., owned by Danny Werner, which owned the franchise through subsidiary Tukdan Ltd. The company has since closed many of its outlets, and now has 7-12 branches, mostly at mall fast food courts.
Sbarro filed for the stay of proceedings against Tukdan, on the grounds that it had not paid Sbarro royalties for several years. Tukdan signed the leases on the Sbarro outlets at the malls, which will render it difficult for the outlet's franchisees to stay in business.
Published by Globes [online], Israel business news - www.globes-online.com - on April 3, 2011
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