Out of Cash, Fast-food Burger Ranch Chain Closes Doors

One day after Paz Oil sues to appoint receiver, branches close and suppliers refuse deliveries.

One day after the Paz Oil company sued to have a receiver appointed for the Burger Ranch fast-food chain that it used to own, some of the branches were already closed and major suppliers were refusing to deliver buns, burgers and special sauce.

Workers in the branches that were not locked shut on Thursday were moping around. They told TheMarker they are under strict orders not to talk about the situation.

They were also told that they just might get last month's salary, some days late. The employees said they feel as if their days on the job are numbered.

The branches in Tel Aviv's Dizengoff Center and Azrieli Center malls did not open on Thursday, and an employee at the New Central Bus Station branch predicted that the outlet would close early Thursday and not open on Friday. Some of his co-workers told their bosses that they will not come to work on Sunday unless they receive their July salaries by then.

They added that their efforts to get some answers from the district manager and company executives have been unsuccessful.

Burger Ranch branches in Tel Aviv, Hod Hasharon, Ra'anana and Rishon Letzion did not make customer deliveries on Thursday.

The chain's major suppliers, for their part, did not deliver raw materials, leading to shortages in some stores. The Opera Tower mall in Tel Aviv ran out of hamburgers and fries.

In February 2006, businessman Yossi Hoshinsky bought the burger chain from Paz, which is owned by banker-businessman Zadik Bino, for NIS 20 million in 32 quarterly payments starting in March 2007, plus future payments determined by the company's performance.

Earlier this year, Hoshinsky died of a heart attack. His business partner, company CEO Rami Elad, stepped in, but he has been unable to meet the loan payments.

A Burger Ranch franchise operator said on Thursday that his branches were open for business and had no shortages of materials from suppliers. He said the problem is with the company-operated branches, not the 12 stores run by franchise holders.

He and his fellow franchisees, he said, are waiting to see how the court decides before hiring an attorney.

An executive at one of the malls where Burger Ranch rents space said Thursday that one of the company's recent rent checks bounced.

Few of the locals and tourists who fled the Tel Aviv heat and humidity for the air conditioned passageways of Dizengoff Center Thursday even seemed to notice that the Burger Ranch, located near the mall's southern King George Street entrance, was closed.

But a boy of about five stopped at the door and tried to persuade his mother to wait for it to open. "They have a hot dog and rice meal that he loves," she explained.

She had not heard about the company's financial woes. "How is that possible?" she asked. "They're the oldest in the country, we grew up on their hamburgers. It must be only temporary." Eventually she prodded her son into action, and they headed upstairs toward the McDonald's.

While the branch in the Opera Tower mall, near the beach, was open Thursday, customers were thin on the ground.

The bearded clerk could be heard apologizing to two girls who ordered large colas: "We're out, there are only bottles or cans."

When a reporter approached and started asking him questions, he was clearly nervous. "I have work to do, I can't talk," he said, before hurrying toward the back. "We were warned that anything we could say could cause damage. They made it clear to us that if we give an interview or complain, it could cause dismissals. I don't want to get in trouble."

A slightly braver colleague related that she had not received her July salary and that it was difficult to get any information about the future.

"The branch manager said he knows exactly as much as we do and that he is getting most of his information from the newspaper.

"A whole month of hard work is down the drain. I was counting on taking a trip abroad before going into the army, and every shekel is important."