Bankruptcy Filing
The franchise operator, Two is One, One is None LLC, is seeking Chapter 7 bankruptcy protection. The company cited financial struggles due to the inability to recover pre-COVID guest counts and last year’s writers’ and actors’ strikes as significant factors.
Source: Blogging Guide/Unsplash
More than 600 employees are affected by this closure.
Financial Strain
The company revealed that paying franchise fees, which totaled around $3.7 million in 2023, significantly strained its finances. These fees were approximately 10% of the locations’ sales.
Source: Freepik
The franchisee had been in operation for over 13 years but couldn’t sustain the financial burden any longer.
Operational Challenges
Two is One, One is None reported that contractual obligations forced them to support the most unprofitable locations.
Source: Louis/Pexels
Despite infusing over $3.5 million into payroll and operations and seeking relief from Alamo Drafthouse to reduce fees and close non-profitable locations, these efforts were unsuccessful.
Impact on Employees
The sudden closure has left more than 600 employees jobless. The company stated they attempted to contact all impacted employees before the news became public.
Source: Freepik
This decision affects not only the staff but also the local film communities that rely on these theaters.
Broader Industry Trends
These closures are part of a larger trend of cinema shutdowns across the country. For example, National Amusements closed its theater in the Bronx, leaving the borough with only one multiplex for 1.7 million residents.
Source: JESHOOTS.com/Pexels
This, in effect, creates “movie deserts” in various regions, where access to cinemas is becoming increasingly rare.
Alamo Drafthouse Response
Alamo Drafthouse expressed their disappointment but assured efforts to reopen in the affected cities. They emphasized that other locations continue to operate normally and they have plans for further expansion.
Source: Melinda Gimpel/Unsplash
The company had previously filed for Chapter 11 bankruptcy in 2021 due to the COVID-19 pandemic but emerged and expanded since.
The Future of Alamo Drafthouse
Despite the closures, Alamo Drafthouse’s nationwide box office draw was up 25% from 2022, bringing in $134 million.
Source: Freepik
The company has been seeking a buyer for months and continues to focus on expansion plans, hoping to recover from this setback.
Customer Concerns
Two is One, One is None recommended that “Season Pass and Victory Members and those guests with gift cards” contact Alamo Drafthouse in Austin for further assistance.
Source: Paolo Chiabrando/Unsplash
This ensures that loyal customers can still find ways to enjoy the Alamo experience despite the closures.
Historical Context
Alamo Drafthouse has faced challenges in the past, including accusations of racism and sexism at one of its Kansas City locations.
Source: Freepik
Despite these issues, the company has remained a beloved chain for its unique movie-going experience, and it continues to attract loyal customers nationwide.
Alamo's Statement
“We are deeply saddened to find it necessary to take this step,” the LLC said in a statement.
Source: Freepik
“We are grateful to all our employees who put in the work, day in and day out, to produce a special movie-going experience.”
Looking Ahead
The closure of these six theaters is a significant blow to the Alamo Drafthouse chain, but the company is determined to bounce back.
Source: TParis/Wikipedia
With continued support from customers and a strategic focus on expansion, Alamo Drafthouse aims to overcome these challenges and continue providing memorable movie experiences.