Dave's Hot Chicken Franchisee Files Chapter 11

A Financing Fight, Not a Franchise Problem

Seven restaurants open, an eighth on the way, and a $30 million sale allegedly blown up by a bank move the franchisee says never should have happened. That's the backdrop as TIG Reaper LLC and three affiliated entities, Reaper Time PA 1 LLC, Reaper Time PA 2 LLC, and Reaper Time NJ 1 LLC, filed for Chapter 11 bankruptcy protection on September 21.

Together they run a multi-unit Dave's Hot Chicken franchise stretched across Pennsylvania, New Jersey, and Delaware. The filing lands in the middle of a bitter dispute with the group's primary lender, Bank Midwest, and the debtors have gone out of their way to draw a hard line between their money troubles and their standing with the franchisor.

No amount is owed to Dave's Hot Chicken, they told the court, and they've asked for permission to keep honoring franchise agreements, loyalty programs, promotions, and marketing obligations while the case plays out. This is a financing fight. The chicken business itself isn't on trial.

Seven Restaurants Running, an Eighth on the Way

Jiger Patel is named in court filings as the member and manager tying all four debtor companies together. At the time of filing, seven restaurants were up and running, with an eighth in Rehoboth Beach, Delaware, on track to open around October 15.

The existing locations sit in Willow Grove, Quakertown, Dover, and Warrington, Pennsylvania, plus Flemington, New Jersey, according to an exhibit attached to the bankruptcy declaration. Each is described as a custom-built Dave's location, a detail the franchisee leaned on to make its point: the capital structure is broken, not the underlying franchise relationship.

The whole filing reads like an attempt to fix the debt side of the business while keeping the operational side, the part that actually serves customers and pays employees, running exactly as it was.

How the Borrowing Trouble Started

The trouble goes back to August 2024, when Bank Midwest handed TIG Reaper a $1.65 million term loan alongside an $8.35 million revolving credit facility to fund expansion.

That wasn't the end of the borrowing. The group also picked up roughly $105,000 from Parafin in January 2026 through a merchant cash advance, along with additional MCA financing from other sources not fully detailed in the filing.

Things came to a head on September 8, when Bank Midwest filed a complaint alleging payment defaults and asked the court to appoint a receiver over the business. The debtors say that's flat wrong. They dispute ever being in default, and they're framing the receivership push as overreach rather than a fair response to missed payments.

The Queso Entities and a $30 Million Sale Gone Sideways

Here's where it gets interesting. Bank Midwest also has a separate lending relationship with a group of businesses referred to in court filings as the "Queso Entities." The Dave's franchisee claims the bank tried to make it responsible for that group's debts, even though it never guaranteed those loans.

According to the filing, Bank Midwest accelerated the Dave's operator's loans and moved for receivership only after the franchisee refused to take on the Queso debt. The timing matters here: the operator says it had an offer on the table worth roughly $30 million, enough to pay Bank Midwest back in full, and that the receivership push derailed the sale.

If that holds up, it means the lender's aggressive posture may have torched a deal that would have made this entire dispute moot. The court hasn't ruled on any of it yet, and both sides' versions remain very much in play.

Fighting Back and Funding the Bridge Themselves

The franchisee is now going after Bank Midwest for damages, arguing the lender's actions are what pushed it into Chapter 11 in the first place. To keep the lights on early in the case, the debtors' own principals are funding a $200,000 junior debtor-in-possession loan rather than leaning on outside capital.

That's a telling move. It signals the ownership group is confident enough in its version of events to bankroll the bridge itself. Despite everything swirling around the case, the Rehoboth Beach opening still appears to be on schedule for October 15, which suggests operations are meant to keep humming along no matter how the legal fight resolves.

Meanwhile, the Broader Brand Is Booming

Zoom out and the contrast is almost jarring. While this one franchisee wrestles with lender problems, the broader Dave's Hot Chicken system is having arguably its best stretch ever. The brand opened a record 136 restaurants in 2025 and hit its 400th location with a debut in Abu Dhabi, United Arab Emirates.

Ownership changed hands too: Roark Capital bought Dave's Hot Chicken in a $1 billion deal that closed in June 2025, and Jim Bitticks, previously the company's president and COO, stepped up to CEO afterward.

Growth hasn't slowed since. There's a major international agreement with Azzurri Group covering 180 restaurants across 10 European countries, fresh development deals in several U.S. markets, and the brand's first airport location at Harry Reid International Airport in Las Vegas. One franchisee's balance sheet problems clearly aren't dragging down the system's momentum.

What the Public Record Still Doesn't Show

What's still missing from the record is almost as notable as what's in it. Bank Midwest's side of the story, beyond the September 8 complaint, hasn't been laid out anywhere in the bankruptcy declaration.

Nobody's said how far along that $30 million sale actually was before the dispute allegedly killed it. And the full extent of the franchisee's merchant cash advance debt beyond the disclosed Parafin amount is only referenced in general terms.

This case is going to hinge on documents and dates that haven't surfaced publicly yet, and until they do, both Bank Midwest and TIG Reaper are telling very different stories about who broke what.

A Financing Fight, Not a Franchise Problem