TIG Reaper, a Dave’s Hot Chicken franchisee since 2024, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. The company operates seven Dave’s Hot Chicken restaurants across Pennsylvania, New Jersey, and Delaware. The court filing also notes that three additional locations are in late-stage development.
TIG Reaper listed its total assets and liabilities between $10 million and $50 million. Its largest listed creditor is Bank Midwest for about $8.8 million. The franchisee also has about $305,000 in merchant cash advances from three lenders.
The Bank Midwest financing dates back to August 2024, when the bank extended TIG Reaper a $1.65 million term loan and a $5 million drawdown line of credit. In November 2025, Bank Midwest increased the drawdown facility, bringing it to $8.35 million. This modification also expanded the bank’s collateral package to cover 10 restaurants.
The legal dispute centers on the Bank Midwest debt. The bank later accelerated about $8.8 million of debt and sued TIG Reaper on Sept. 8, seeking approximately $8.84 million, plus penalties and fees, and asking for a receiver to take control of and sell restaurant assets. TIG Reaper claims it made a nearly $104,000 payment on July 20 and disputes several nonmonetary defaults.
At the same time, TIG was pursuing a sale of its Dave’s Hot Chicken business for approximately $30 million. According to TIG’s complaint, the proposed sale would have been sufficient to repay its debt to the bank. But TIG alleges that the bank’s actions, including the declaration of defaults, interfered with the sale and caused a prospective buyer to reduce its offer.
On Sept. 21, the same day the bankruptcy petitions were filed, TIG Reaper and three related entities countersued Bank Midwest, alleging breach of contract, among other claims. It is seeking at least $14 million in damages and asking the bankruptcy court to declare that its Dave’s entities are not responsible for the debts of TIG’s separate Qdoba businesses and that Dave’s collateral cannot be used to satisfy those obligations.
In a statement emailed to Nation’s Restaurant News, Dave’s Hot Chicken said, “This is a financial matter involving TIG, an independently owned and operated franchisee, and its lender. The loan and related financial dispute are between TIG and its lender, not Dave’s Hot Chicken corporate, and the situation does not involve the broader Dave’s Hot Chicken franchise system. The affected restaurants remain open, and Dave’s Hot Chicken remains focused on maintaining its brand standards and delivering the experience guests expect across its system.”
This filing comes as 9-year-old Dave’s continues its staggering growth pace across the country. In 2025, the company’s sales grew by 51% to $965.9 million, while its unit count grew 52.3% to finish the year with just under 400 locations, according to Technomic data.
Notably, TIG is a multi-brand franchisee and recently defaulted on a $20 million loan from Bank Midwest, impacting its 41 Qdoba restaurants across Delaware, New Jersey, New York, Pennsylvania, and Florida.
According to those court filings, Bank Midwest said the franchisee violated terms of its loan agreements and failed to correct the problem after being given an opportunity to do so. The bank alleges that TIG had developed a major liquidity problem and failed to disclose it.
The suit alleges that the franchisee entered into an agreement to terminate its Qdoba franchise relationship and sell the restaurants without notifying the bank, potentially threatening the collateral securing the loan. Bank Midwest is now seeking the appointment of a receiver to manage and eventually sell the 41 locations to repay the debt.
TIG’s Dave’s and Qdoba’s loans were separate. TIG’s bankruptcy complaint contends that the Dave’s entities did not guarantee the Qdoba debt and that the two groups of loans were not cross-collateralized. TIG is asking the bankruptcy court to declare that its Dave’s entities are not responsible for the Qdoba obligations and that Dave’s collateral cannot be used to satisfy Qdoba debt.
Contact Alicia Kelso at [email protected]
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