A Schlotzsky’s franchisee in North Texas filed for bankruptcy after struggling with profitability and mounting financial obligations.
JPrieto Hospitality filed for bankruptcy protection November 5 in the U.S. Bankruptcy Court for the Western District of Texas. The company, led by managing member Jorge Prieto, is seeking to reorganize its finances and continue operating its remaining restaurants.
According to Schlotzsky’s 2026 FDD, JPrieto operated eight restaurants at the end of 2025, with two additional franchise agreements terminated during the year. Meanwhile, the company’s bankruptcy filing identifies five restaurant locations in Fort Worth (two), Mansfield, Grand Prairie, and Cedar Hill.
JPrieto reported $8.26 million in revenue in 2024 and $8.2 million in 2025, according to court documents. Its 2025 federal tax return showed just $45,051 in ordinary business income, representing a profit margin of roughly 0.5 percent.
Revenue totaled $4.12 million from the beginning of 2026 through the November 5 bankruptcy filing.
Prieto attributed the company’s financial difficulties to changing economic conditions in the Fort Worth market, including reduced business activity and work slowdowns.
JPrieto explored selling its business or assets, restructuring its obligations, and refinancing debt before turning to bankruptcy. Court documents list approximately $533,000 in assets and $351,000 in liabilities.
Schlotzsky’s franchisor GoTo Foods is its largest unsecured creditor, owed approximately $148,642. Other creditors include food distributor Ben E. Keith, owed $35,000, TCR Heating & Air, owed $19,422, and Cooling Equipment Specialist, owed $18,776.
JPrieto believes its remaining restaurants can support a successful reorganization, aided by new marketing efforts and improved operating performance.
“JPrieto anticipates that continued operations with remaining stores will generate sufficient net income to formulate a confirmable plan,” Prieto said in the court filing.
JPrieto is the latest restaurant franchisee to seek bankruptcy protection in 2026, following filings involving operators of Wendy’s, Dave’s Hot Chicken, Outback Steakhouse, and Denny’s. The financial difficulties have also affected another GoTo Foods brand. Quality Fresca, a Moe’s Southwest Grill franchisee, filed for bankruptcy in August after shrinking its portfolio from 69 restaurants to 38.
