-
The bankruptcy of the parent company puts the fate of its franchisees in serious jeopardy.
-
Many franchises have had to stop making donuts in recent months.
-
The fate of every product is uncertain.
When a business person buys a franchise, they are making a bet on the franchise operator. They expect the company to live up to its promises in advertising, marketing support and product delivery.
When that doesn’t happen, it puts franchise operators in a challenging position. In many cases, their agreements prevent them from doing certain things for themselves, but in many cases, they have no choice but to choose.
Jack’s Donuts franchises have recently been included in this situation.
Jack’s donuts opened a production center and distribution center back in October 2023, called Commissirness.
When that facility opened, CEO Lee Marcum asked many of the company’s franchisees to stop making donuts in their stores and buy them from education. Many did so, selling their baking equipment, setting up their packers, and generally devoting their energy to making their basic product.
“The donuts are not good,” franchise owner Angi O’Connell Bone told WRTV. “We lost customers when we changed, and they compared us to a gas station station. That was very sad.”
That situation, and other legal issues that followed led to franchise operators sending a letter to Marcum calling for their resignations.
“Continued mismanagement, accompanied by worrying financial practices, has not directly affected our performance but has also led to a widespread loss of confidence in the future of the company,” Read the letter.
Multiple Bankruptcy:
“In the last 18 months, we have seen a noticeable decrease in sales, income and customer loyalty. We strongly believe that these problems stem from the company’s decisions, poor financial management, and the creation of many businesses for financial gain.”
Since this letter was posted, the situation has been swirling around bad donuts and Jack’s Donuts, the parent company, has filed for Chapter 11 bankruptcy.
Franchise operators, it should be noted, continue to operate in their stores, with others renting kitchens or buying equipment to return to making donuts.
-
Court: Nast Bantrupsry Court, Southern District of Indiana
-
Case number: 25-773353
-
Filed:On October 24, 2025
-
CHAPTER:11 (subchapter v, small business reorganization)
-
Judge: James M. Carr
-
Status: Active, voluntary application
