Popular 60-Year-Old Midwest Donut Chain Files For Bankruptcy

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Midwestern donut lovers, brace yourselves, as there's trouble brewing in the world of Jack's Donuts. While this Indiana-based chain of donut shops has been serving up sweet treats to customers since 1961, a recent Chapter 11 filing could have major repercussions. This development puts Jack's in league with other chain restaurants that have filed for bankruptcy in 2025, including On the Border and Hooters. In a post on Facebook, Jack's Donuts stated, "We have plans for continued and uninterrupted future operations ... Our stores remain open, our teams are at work, and our commitment to quality, tradition, and community remains unchanged."

Like many restaurant chains, Jack's has franchisees that operate individual stores. And while franchisees can make some decisions on their own, they're largely beholden to the requirements of their corporate overlords. For example, Jack's Donuts established a production hub in 2023 known as The Commissary and required some franchisees to source baked goods from the center instead of baking them in-store. One franchisee, who spoke with WRTV Indianapolis in March of this year, said The Commissary-provided donuts "weren't great" and claimed the shop "lost customers when we changed over, and they compared us to a gas station donut." 

It's not totally clear how donuts got their hole-y shape, but it's often claimed that a maritime baker did away with the center of the fried dough to help it cook evenly. Regardless of their origins, donuts are practically universally beloved, which makes Jack's Donuts recent troubles a bit curious. Some insight can be gained by a letter that was submitted to the CEO of Jack's Donuts, Lee Marcum, by several franchisees. The letter says in part, "ongoing mismanagement, coupled with troubling financial actions, has not only directly impacted our operations but has also led to a broader loss of confidence in the company's future," and the franchisees ultimately call for Jack's CEO to resign. 

It's worth noting that the franchisee letter was submitted in January 2025, which indicates that problems have been brewing at the donut chain for some time. As for the switch to a single production and distribution hub, a move that some franchisees characterized as detrimental to their businesses, it's not fully clear why that change was made. However, Jack's Donuts has been subject to several lawsuits and legal judgements, and the chain is estimated to have roughly $14.2 million in outstanding financial obligations. It's not yet clear whether Jack's will be included in the beloved restaurant chains we might lose in 2025, but it's safe to say that the bankruptcy filing (and poor leadership) could permanently alter the future of the donut shop.