Global Midsouth Holding Corp., a franchisee operating Checkers and Rally's restaurants, has filed for Chapter 11 bankruptcy protection. The Memphis-based company cited plummeting revenue and received a foreclosure notice on its Jackson, Tennessee, location as reasons for the filing, which was submitted on October 28, 2026, in the U.S. Bankruptcy Court for the Western District of Tennessee.

The bankruptcy filing automatically stays any legal actions against the debtor as the case proceeds. Global Midsouth reported $1.9 million in assets and $1.3 million in liabilities. The company's revenue has decreased over the past two years, falling from $860,000 in 2024 to $800,000 in 2025. Through the filing date in 2026, revenue had dropped to $582,000.

Sedrick Turner, the owner of Global Midsouth, has been a franchisee with Checkers and Rally's for nearly three decades, building a portfolio of 16 locations across Alabama, Missouri, Mississippi, and Tennessee. In a statement, Turner emphasized his commitment to elevating the guest experience, strengthening his team, and serving the community through hands-on operations and consistent quality.

Checkers Drive-In Restaurants, founded in 1986, operates over 700 locations nationwide. The brand merged with its competitor Rally's in 1999. The franchise model allows operators to build restaurants on smaller parcels of land than many rival drive-thru chains.

This bankruptcy filing by Global Midsouth follows a similar move by another Checkers Drive-In franchisee, C.S. Holdings of Tampa LLC, which operates two locations in Florida and filed for Chapter 11 bankruptcy in July. The corporate franchisor, Checkers Drive-In Restaurants Inc., is not directly affected by these franchisee bankruptcies as it licenses its brand to independent owner-operators.

These financial difficulties for Checkers and Rally's franchisees occur amidst broader challenges in the fast-food sector. Notably, Meritage Hospitality Group, a significant Wendy's franchisee, filed for bankruptcy in September, announcing plans to close at least 20 locations. Meritage had already closed approximately 60 underperforming stores prior to its bankruptcy filing, bringing its total closures since last year to about 93.

While rising costs are often cited for these issues, some observers suggest that declining food quality and a lack of innovation may also contribute to the challenges faced by certain fast-food entities.