Geddo Corporation, a franchisee operating 12 Farmer Boys restaurants across California, filed chapter 11 on March 31, 2026 in the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, under lead case number 8:26-bk-11022. Trade and credit reporting attributes the filing to cash-flow strain from merchant cash advance loans. The debtors reported assets of $1 million to $10 million against liabilities of $10 million to $50 million, and the voluntary petition indicates that funds are expected to be available for distribution to unsecured creditors.
The case is jointly administered with affiliated debtor entities and is assigned to Judge Mark D. Houle. The filing adds to a wave of California restaurant-franchisee chapter 11 cases that reporting has tied to the state's rising fast-food labor costs, with merchant cash advance debt appearing as a recurring liquidity trigger across the group.
Geddo Corporation (jointly administered with affiliated debtor entities)
Court
U.S. Bankruptcy Court, Central District of California (Santa Ana Division)
Case Number
8:26-bk-11022
Petition Date
March 31, 2026
Judge
Hon. Mark D. Houle
Assets
$1 million to $10 million
Liabilities
$10 million to $50 million
Case Snapshot
Merchant Cash Advance Debt and the Liquidity Squeeze
The Geddo Corporation docket-entry record does not set out a narrative of the causes of the filing, but trade reporting attributes the case to cash-flow problems tied to merchant cash advance loans. Merchant cash advances provide upfront capital in exchange for a fixed share of future receipts, and their daily or weekly remittance terms can compound cash-flow pressure for an operator already absorbing higher costs. Multiple restaurant franchisees entered chapter 11 in 2025 and 2026 to address liquidity crises caused by merchant cash advance borrowing, using the cases to restructure debt, close underperforming units, and manage lease obligations.
Geddo filed in parallel with a separate Carl's Jr. franchisee chapter 11, Sun Gir Inc. and affiliated entities. The two are distinct franchisee groups facing similar pressure rather than a single combined case, and the petition filings do not disclose the identity of Geddo's merchant cash advance funders, the size of its prepetition obligations, or any prepetition liens.
First-Day Motions and Joint Administration
The debtors entered chapter 11 as a jointly administered group of affiliated entities rather than as a single corporate filer, consolidating the related companies that operate the 12 Farmer Boys locations under one docket for administrative purposes. Multiple debtor entities filed separate non-individual debtor declarations in late April 2026, consistent with the multi-entity structure.
In the opening days, the debtors placed a first-day motions package and a cluster of emergency motions on the docket, supported by a same-day declaration, the standard opening posture for an operating debtor using chapter 11 to restructure debt and manage lease obligations. The court held first-day and emergency hearings on April 9, 2026, with several matters heard, continued, or rescheduled, and entered a set of first-day orders that day. The debtors later filed professional retention applications and a status report ahead of the initial chapter 11 status conference. The specific relief sought in the emergency motions — cash collateral budget, adequate-protection terms, and the treatment of any secured or merchant cash advance positions — is not yet part of the public record.
Geddo's 12-Unit Portfolio and Arizona Expansion
George Sadek and his brother Joseph operate 12 Farmer Boys locations in California, a multi-unit portfolio they began building when they started franchising the brand in 2007. In November 2025, roughly four months before the filing, the brothers signed a 10-unit area development agreement for the West Valley area of Phoenix, Arizona, participating in the franchisor's $100,000-per-location royalty rebate program. The petition filings do not specify which California locations or Arizona development rights are held by the debtor entities.
Farmer Boys, the franchisor, is a Riverside, California-based fast-casual chain. Farmer Boys is not a debtor in the case; Geddo Corporation is a separate franchisee operating company whose distress does not, on the current record, implicate the franchisor's balance sheet.
California Fast-Food Wage Pressure and the Franchisee Filing Wave
California's $20-per-hour fast-food minimum wage, effective April 2024, applies to fast-food chains with 60 or more locations nationally. A UC Santa Cruz study found the policy led to higher menu prices, reductions in working hours, and elimination of overtime across covered chains. The Geddo filing is one of several California restaurant-franchisee chapter 11 cases attributing distress in part to those cost increases.
In April 2026, Friendly Franchisees Corporation, a 65-unit Carl's Jr. operator led by CEO and founder Harshad Dharod, filed chapter 11 in the Central District of California. Dharod's group operates through entities including Sun Gir Inc., DFG Restaurants, and Second Star Holdings, covering payroll for approximately 1,000 employees. Sun Gir, which operates 59 of those Carl's Jr. locations, reported $19.9 million in net sales in the first quarter of 2026 but a $2 million net loss over the same period. Dharod stated in a court filing that the $20 minimum wage materially increased operating expenses. Carl's Jr. U.S. system sales declined 6% in 2025, and franchisees closed 40 locations that year.
Rubio's Coastal Grill closed 48 California locations in May 2024 and filed chapter 11 in June 2024, citing diminishing in-store traffic and California minimum-wage increases among the factors. FAT Brands, the parent of Fatburger, Johnny Rockets, and Round Table Pizza, filed chapter 11 in January 2026 in the Southern District of Texas with roughly $1.3 billion in debt after creditors accelerated about $1.26 billion of securitized debt, and the company has since moved toward a court-supervised sale of its restaurant brands.
The broader filing environment has tightened. Total commercial chapter 11 filings reached 2,422 in the first quarter of 2026, a 37% increase from 1,764 a year earlier, and subchapter V small-business elections rose 67% to 833 over the same period, according to Epiq.
Franchise Agreement Treatment and Unsecured Creditor Prospects
Farmer Boys franchise agreements run for 20 years, and the debtors' assumption or rejection of individual agreements under section 365 of the Bankruptcy Code is not addressed in the current record. The voluntary petition indicates that funds are expected to be available for distribution to unsecured creditors; the amount, timing, and form of any distribution remain undisclosed at this stage.
The debtors' bankruptcy counsel is Garrick A. Hollander of Winthrop Golubow Hollander, LLP, a Newport Beach insolvency firm whose practice covers chapter 11 reorganizations, out-of-court workouts, and distressed-asset sales. The case is assigned to Judge Mark D. Houle, and the docket through mid-May 2026 reflects an operating case still in its early administrative phase, with no plan of reorganization yet on file.
Key Timeline
Geddo filed March 31, 2026 and the case advanced through first-day hearings, joint administration, and a chapter 11 status conference over the following six weeks.
Emergency-motion cluster and supporting declaration filed
April 9, 2026
First-day and emergency hearings held; first-day orders entered
April 29, 2026
Status report filed ahead of the initial chapter 11 status conference
Key Timeline
Frequently Asked Questions
What is Geddo Corporation?
Geddo Corporation is a franchisee operating 12 Farmer Boys restaurants in California, led by CEO George Sadek and his brother Joseph. It filed chapter 11 as a jointly administered group with affiliated debtor entities.
When and where did Geddo Corporation file for bankruptcy?
Geddo Corporation filed chapter 11 on March 31, 2026 in the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, under lead case number 8:26-bk-11022, before Judge Mark D. Houle.
Why did Geddo Corporation file for chapter 11?
The docket-entry record does not state the causes, but trade reporting attributes the filing to cash-flow strain from merchant cash advance loans, against a backdrop of rising California fast-food labor costs affecting restaurant franchisees.
Will unsecured creditors receive a distribution?
The voluntary petition indicates that funds are expected to be available for distribution to unsecured creditors. No specific amounts, timelines, or distribution mechanisms have been disclosed at this early stage of the case.
Who is representing Geddo Corporation in the bankruptcy?
Garrick A. Hollander of Winthrop Golubow Hollander, LLP, a Newport Beach insolvency firm, serves as bankruptcy counsel for the debtor entities.
For related ElevenFlo coverage of restaurant restructurings, see Neighborhood Restaurant Partners, a 53-unit Applebee's franchisee that filed with a Dine Brands stalking horse; Buca di Beppo, an Italian chain sold through a credit bid; and Tijuana Flats, a Tex-Mex chain that emerged after closing 40 restaurants.
cash-flow strain from merchant cash advance loans https://www.creditandcollectionnews.com/farmer-boys-burger-chain-franchisee-files-chapter-11-bankruptcy/
California restaurant-franchisee chapter 11 cases https://ocpathink.org/post/independent-journalism/sq-832-style-law-increases-california-bankruptcies
cash-flow problems tied to merchant cash advance loans https://www.ereadit.com/44-year-old-burger-chains-franchisee-files-chapter-11-bankruptcy/
entered chapter 11 in 2025 and 2026 to address liquidity crises caused by merchant cash advance borrowing https://www.franchisetimes.com/franchise_news/financial-and-legal-troubles-are-pushing-more-franchisees-into-bankruptcy/article_bcec5218-c0d7-4a7e-a1f3-d264db654da8.html
12 Farmer Boys locations https://www.farmerboys.com/franchising/blog/2023/harvesting-success-the-sadek-brothers-journey-with-farmer-boys-a-farm-fresh-legacy-in-southern-california
10-unit area development agreement https://www.farmerboys.com/news/press-release/2025/farmer-boys-expands-in-arizona-with-10-unit-area-development-agreement
UC Santa Cruz study found the policy https://www.restaurantbusinessonline.com/financing/bankrupt-carls-jr-franchisee-blames-its-financial-problems-californias-20-wage
65-unit Carl's Jr. operator https://www.restaurantdive.com/news/carls-jr-operator-friendly-franchisees-corp-files-chapter-11-bankruptcy/816730/
closed 48 California locations https://www.foxbusiness.com/media/restaurant-chain-shuts-nearly-50-locations-california-following-minimum-wage-hike
accelerated about $1.26 billion https://www.financierworldwide.com/fat-brands-enters-bankruptcy
moved toward a court-supervised sale https://www.qsrmagazine.com/story/bankrupt-fat-brands-eyes-potential-sale/
2,422 in the first quarter of 2026 https://www.abfjournal.com/epiq-total-overall-commercial-bankruptcies-increase-14-y-y-in-q1-26/
20 years https://www.ifpg.org/top-franchises/farmer-boys
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.