Denny’s restaurants operator files for Chapter 11 bankruptcy

Established in 1953 in a suburb of Los Angeles under the original name Danny’s Donuts, what would eventually grow into the Denny’s diner chain started out as a donuts stand and only after seeing some initial success expanded to serve more items and operate 24 hours a day.

Today, Denny’s has over 1,300 locations both across the U.S. and in countries such as Canada, Mexico, New Zealand, and The Philippines. The vast majority are franchise-owned and have been struggling with falling sales over the last two years.

One franchisee, M15 Inc., filed for Chapter 7 bankruptcy and closed five diner locations across the Midwest in September 2026. The latest to file for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Texas is EYM Diner of DFW.

EYM Diner of DFW files for Chapter 11 bankruptcy in Texas

The restaurant franchisee group EYM Group was established in 2008 out of Irving and at a peak was behind more than 200 Denny’s, Pizza Hut and Panera restaurants across Texas and Florida. According to the filing, EYM Diner of DFW reported less than $50,000 in assets and between $10 and $50 million in liabilities.

Founder and manager Eduardo Diaz is listed as the signatory while Sarah M. Cox
of Spector & Cox law firm is the attorney representing the company in the insolvency request.

EYM Café, the branch of the wider group behind Panera franchises, also filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Texas in August 2025.

What is happening with EYM Diner restaurant group

Panera had earlier taken EYM Diner to court over continuing to operate restaurants using its brand after the former pulled out of the contract due to defaults on agreed-upon payments. Debts listed in the filing included $13 million owed to City National Bank (CNB) and approximately $550,000 owed to the Internal Revenue Service (IRS).

A federal judge sided with Panera and ordered EYM Diner to stop using the fast-casual brand. As a result, EYM Café closed 15 Panera locations in the Greater Houston area last year.

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The latest bankruptcy filing is in a different Texan court and for a different branch of the wider EYM Group. Further information about EYM Diner’s financial situation or what led to the bankruptcy is not currently available while an EYM company representative could also not be immediately reached for comment.

This filing does, however, declare that no funds will be available for distribution to unsecured creditors after administrative expenses are paid; this means that EYM Diner is insolvent to the point of barely being able to cover its legal expenses.

The Denny’s chain, meanwhile, is owned by a private investor group made up of TriArtisan Capital Advisors, Treville Capital Group, and Yadav Enterprises following a $620 million all-cash deal to take it private in January 2026. The latter company is one of the diner chain’s largest franchises, operating restaurants in more states than EYM Diner.

Related: Outback Steakhouse restaurant franchisee files for Chapter 11 bankruptcy