Denny’s Operator EYM Diner Files Chapter 11 With 30 Restaurants
EYM Diner, which runs 30 Denny's in Texas and Florida, filed for Chapter 11. What it owes, the IRS claim and Denny's plan to sell the restaurants.
EYM Diner, a Texas-based franchisee that runs 30 Denny’s restaurants in Texas and Florida, filed for Chapter 11 bankruptcy on Wednesday in the Northern Texas bankruptcy court, according to a report carried by Yahoo Finance. The company listed less than $50,000 in assets against liabilities of between $10 million and $50 million.
Denny’s says it wants the restaurants to keep operating under new owners. The franchisor is working with EYM founder Eduardo Diaz to sell the locations to other Denny’s franchisees, Chief Development Officer Mark Burgess said in a statement.
The IRS tops the creditor list
The largest unsecured creditor named in the filing is the IRS, with a claim of nearly $3.5 million tied to unpaid payroll taxes. An unsecured creditor holds no collateral, so in a bankruptcy it is paid only from whatever value remains after secured lenders. With assets reported under $50,000, the gap between what EYM Diner owns and what it owes is wide.
EYM Diner could not be reached for comment, and an attorney for EYM had not responded by the time the report was published.
What it means for workers and diners at the 30 restaurants
Chapter 11 lets a company keep running while it reorganizes or sells assets under court supervision, which differs from a Chapter 7 liquidation. Denny’s has said it hopes to place the restaurants with other operators. Burgess said some of the locations are “viable restaurants” and that franchise partners are willing to take them on. The company did not say how many of the 30 would be sold, which buyers are involved, or what the plan means for staff.
How EYM Group got here
Diaz was running McDonald’s Mexico as its president when he set up EYM Foods in 2007 to own McDonald’s restaurants himself. The group later added Denny’s, Panera, KFC, Burger King and Pizza Hut. Since 2023 it has gone through several bankruptcies and closures across those brands.
- Pizza Hut: EYM Pizza grew past 140 locations, and in 2021 Diaz agreed to sell it for $97 million. The buyer walked away as the economy weakened. Pizza Hut later sued EYM, alleging underperformance and late royalty payments. EYM Pizza filed for bankruptcy, and in early 2025 it sold 77 restaurants for less than $12 million and closed the remaining 65.
- Burger King: the chain sued EYM King in February 2023 over late royalties, and EYM shut all 26 of its Burger Kings the following month.
- KFC: EYM closed 25 locations in Illinois, Indiana and Wisconsin in 2023.
- Panera: Panera sued EYM Cafe in 2025 over late royalty payments. In August of that year, after a federal judge barred it from using Panera’s name and trademarks, EYM Cafe filed for bankruptcy.
Denny’s is in the middle of its own turnaround
The filing lands while Denny’s is trying to recover from falling sales and customer traffic. The 1,400-unit chain was taken private in January and had planned to close about 90 underperforming restaurants. Franchisees run about 96% of Denny’s locations, so the health of large operators like EYM Diner shapes how much of the system stays open.
What to watch next
The next steps will play out in the Texas bankruptcy court, where any sale of the restaurants to other Denny’s franchisees would need approval. Readers should watch for a buyer list, the number of locations transferred, and how the court treats the IRS payroll tax claim. No dates for hearings or a sale were disclosed.
Source: Yahoo Finance
