Jack's Donuts Franchisor Files Chapter 11, $14M Debt

Jack’s Donuts of Indiana Commissary LLC filed for Chapter 11 in U.S. Bankruptcy Court for the Southern District of Indiana, listing about $14.2 million in liabilities, roughly $1.4 million in assets and more than 100 creditors; related entities Marcum Industries and KCL Group filed simultaneously. The filings cap months of legal and financial troubles tied to CEO Lee Marcum, including multiple lawsuits and judgments and significant creditor claims from Old National Bank (about $3.4–$3.5M) and Carter Logistics (about $700K–$769K). Troubles intensified after the company opened a large New Castle production and distribution center in October 2023; franchisees were asked to stop baking in-store, many sold equipment, reported poorer-quality donuts and falling sales, and some have since scrambled to resume production. Franchise owners representing numerous locations sent a letter demanding Marcum’s resignation, accusing him of mismanagement and misappropriation of funds. Jack’s Donuts says the Chapter 11 affects the franchisor and related entities only, that independently owned stores remain open, and that it intends to continue normal operations while pursuing reorganization under court supervision.