---
title: "A Farmer Boys franchisee declares bankruptcy and blames cash advance financing"
url: https://burnaze.com/article/3bd9f54a-08b2-4b44-809a-5f8ee1ce0d92
source: "Restaurant Business"
original_url: https://restaurantbusinessonline.com/financing/farmer-boys-franchisee-declares-bankruptcy-blames-cash-advance-financing
category: "Restaurants"
industry: "Restaurants"
topics: ["Finance & M&A"]
published: 2026-04-10T15:41:33.000Z
modified: 2026-10-31T14:44:04.782Z
image: https://cdn.informaconnect.com/platform/files/public/2026-04/background/Farmer%20Boys%20Shutterstock.jpg?VersionId=pbxqr7fdmAFYZr6YVDd95Mc6ZC9TapfE
---

# A Farmer Boys franchisee declares bankruptcy and blames cash advance financing

**TL;DR:** Geddo Corp., a 12-unit Farmer Boys franchisee, has filed for bankruptcy after taking out 40 merchant cash advance loans worth $5.2 million. The company operates 12 locations in California and Arizona and was unable to pay its vendors due to the high-interest financing.

*originally published in Restaurant Business on 2026-04-10. [Read the original](https://restaurantbusinessonline.com/financing/farmer-boys-franchisee-declares-bankruptcy-blames-cash-advance-financing).*

## Key facts

- Geddo Corp. filed for bankruptcy after taking $5.2 million in merchant cash advances.
- The company operates 12 Farmer Boys locations in California and Arizona.
- High-interest financing has led to bankruptcies for other franchisees, including MTF Enterprises and Matador Restaurant Group.

## Story

Another multi-unit franchisee has filed for bankruptcy after using merchant cash advances to finance their business.

Geddo Corp., which operates 12 locations of the fast-casual burger chain Farmer Boys in California and Arizona, filed for bankruptcy earlier this month after taking out 40 merchant cash advance loans worth $5.2 million.

## Franchisee operations

Geddo operates 11 restaurants throughout California, in cities like Orange, Lodi, Corona and Bakersfield.

The company planned to build two locations in Arizona, in Goodyear and in Phoenix. It took out the MCA funds to pay for the buildout.

Merchant cash advance companies provide temporary financing for mostly small businesses and are repaid by taking funds directly out of accounts. They charge high interest rates.

Such financing as a result can be expensive and can drain companies of their cash flow. That is what happened in this case.

## Cash flow problems

The lenders’ collection efforts “caused severe pressure” on Geddo’s cashflow and made it unable to pay its vendors. The franchisee defaulted on payments to the franchisor, vendors and other service providers.

Geddo made an “extensive effort” to negotiate with lenders before filing for bankruptcy, and “apart from a few reasonable MCA lenders, most greedily refused to cooperate and chose to strangle” the franchisee, the company said in court documents.

Geddo said that it cannot sustain its operations with the loans in place and after the negotiations did not come to an agreement it filed for bankruptcy.

## Industry trends

This is the latest in a string of franchisee bankruptcies this year, including large-scale operators of Carl’s Jr., Subway, Popeyes and Firehouse Subs. Many franchisees are struggling with weak sales due to the economic environment along with rising costs.

But financing challenges in some cases have operators turning to MCA providers. MTF Enterprises, a 43-unit Subway franchisee, filed for bankruptcy after using high-interest advance financing.

Last year, Matador Restaurant Group, a Del Taco franchisee, filed for bankruptcy after taking out $2.7 million worth of such advances.

Farmer Boys has more than 100 locations in California, Nevada and Arizona. System sales at the brand decreased 3.1% last year to $234 million, according to data from Restaurant Business sister company Technomic.

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## Entities

- QSR (sector)
- Restaurant Business (publication)
- Subway (company)
- Popeyes (company)
- Del Taco (company)
- Firehouse Subs (company)
- Carl's Jr. (company)
- Farmer Boys (company)
- franchisee bankruptcy (topic)
- merchant cash advances (topic)
- MTF Enterprises (company)
- Geddo Corp. (company)

---
Originally reported by Restaurant Business (https://restaurantbusinessonline.com/financing/farmer-boys-franchisee-declares-bankruptcy-blames-cash-advance-financing). Summarized by Burnaze (https://burnaze.com/article/3bd9f54a-08b2-4b44-809a-5f8ee1ce0d92).