A Panera operator filed for bankruptcy just weeks after a court ordered it to shut down unauthorized operations at bakery-cafés across Texas.
EYM Café, which once operated 15 Panera locations in the Houston area, collapsed after months of mounting tension with Panera. The company’s franchise agreements were terminated earlier this year over a series of alleged violations, including missed royalty payments, failure to meet food safety standards, and unpaid vendor invoices.
In May, Panera filed a lawsuit accusing EYM of continuing to operate the cafés using its name, logos, uniforms, and signage—even after the franchise agreements were officially terminated. On June 17, a federal judge sided with Panera, granting a permanent injunction ordering EYM to cease operations under the Panera brand and remove all traces of its intellectual property by August 21.
The injunction also imposes a two-year non-compete clause on EYM owner Eduardo Diaz, barring him from owning or advising any competing food business within five miles of a Panera location.
But EYM Café is just one part of Diaz’s unraveling franchise group. EYM Pizza, previously one of the largest Pizza Hut franchisees in the U.S. with 140 restaurants, filed for bankruptcy in July 2024 after a prolonged legal battle with the brand. Seventy-seven locations were sold out of bankruptcy to six buyers; the remaining 60 or so closed permanently.
EYM Chicken, the KFC arm of the group, shut down more than two dozen restaurants in Wisconsin, Indiana, and Illinois last year amid similar operational strain.
And in 2023, EYM King of Michigan, the Burger King division of the company, closed all 26 of its locations in the state following a contract dispute. Burger King had sued EYM King for nonpayment of royalties, advertising, and other fees, with court documents showing the franchisee owed more than $75,000 across at least 14 locations.
