Willy Burger, Crown Pizza owner Dallon James responds to closure

Jun 20, 2023

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Willy Burger is one of the three establishments now run by Dallon James, along with neighboring Crown Pizza in Beaumont and a Willy Burger location in Katy. Photo made Friday, July 23, 2021 Kim Brent/The Enterprise

Crown Pizza is next to Willy Burger on Calder Road.

Beaumont business owner Dallon James owes more than $16,000 in sales and property taxes -- a look into the "financial struggles" he says has caused the extended closure of Willy Burger and Crown Pizza in Beaumont and Katy.

According to the Texas Comptroller of Public Accounts' Office, James owes $15,488.92 in sales tax from Nov. 22 until the present at the Beaumont properties, which resulted in a lien filed against him on April 28.

He also owes $1,070.16 in property taxes on more than $25,000 in inventory, furniture, fixtures, machinery and equipment at the Jefferson County locations, according to the Jefferson County Tax Assessor's Office.

And while Crown Pizza Manager Thomas Adams says he and other employees are passionate about their jobs and the restaurants and he understands that speaking out could endanger James' reputation, he's worried his colleagues won't be able to feed their children or themselves if the situation isn't rectified soon.

"I live in a rural area. My bank account is completely frozen. I can't even go into town to find another job, because I'm completely frozen out of my account," he said. "I don't have any money or anything. It's very disheartening to see these super dedicated employees who have been with me for a long time say that they can't feed their kids or themselves."

James told The Enterprise on Monday evening that the financial struggles were brought on by "poor performance" at the newly-opened Crown location in Katy. While the team hoped to reopen Monday -- more than a week after employees were told they would be closed May 26 through Memorial Day weekend -- they were not able to get "everything done we needed in order for that to happen."

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"The Thursday before Memorial Day weekend ... we were told our paychecks would be delayed until at least that Tuesday of the holiday weekend, and we'd be closed that whole weekend," Adams said. "The next day, we were told we'd be closed for a while longer, but here was our money. We met up at the store when it was closed, the checks were distributed, we deposited them and we thought there was enough money to get through until we reopened."

It wasn't until May 31 that Adams looked in his bank account, saw the money was gone and he started receiving calls from fellow employees who were experiencing the same situation.

Beaumont Attorney Cory Crenshaw said a few employees came to him for help, and he was able to work with James to see the most pressing situations addressed.

But when other employees will be paid is still unclear.

"I understand the employees may not believe it at this time, but we are doing whatever is necessary to try and make sure they are ok," James told The Enterprise. "This affects them and their families directly so they are our first priority. Making decisions like this (does) not come lightly and we are doing the best we can."

He said the team has explored selling the restaurants and continues to be in "active discussions."

On Tuesday, the Willy Burger/Crown Pizza former property owner, who is financing the debt on the buildings, agreed to forgive royalty payments required by the loan, according to the loan modification agreement. The 3% royalties on gross sales will be forgiven for the fourth quarter of 2022 and the first quarter of 2023. Payments for the second and third quarters of this year will be waived, and the former property owner will require payments of just 1.5% of gross sales for fourth quarter 2023.

The move comes one day after Neches Restaurant Group LLC, the operations group under which the businesses fall, filed for Chapter 7 "voluntary" bankruptcy, meaning a bankruptcy trustee sells certain assets to use the proceeds to pay creditors and other involved parties.

"Unfortunately, as much as we like to think of these restaurants as an extension of our family, at the end of the day it is a business," James said. "Businesses cannot survive without adequate profits to sustain operations and there have been many circumstances that were unforeseen and out of all our control that happened all at once. Any restaurant owner will tell you how difficult it is to survive and be successful in this industry, and we are experiencing this firsthand."

RELATED: Willy Burger looks to next chapter

James and his wife purchased the Beaumont locations in December 2020 and Willy Burger in Katy in July 2021.

Since the purchase, the pair launched new websites for both brands, opened the Crown Pizza location in Katy and were planning to move the Beaumont stores to new locations with more parking and seating, in addition to opening additional franchises.

Willy Burger originally was opened by Colburn McClelland, who started the business in 2012 in an effort to bring an "old-school hamburger joint" to Beaumont. When he moved his family to Katy, he offered to have James take over the business in Beaumont. Shortly after, McClelland also offered to sell the Katy location.

"Despite this temporary time of uncertainty, we are certain that the restaurants will be around in our community for a long time to come," James said Monday.