Indoor pickleball franchisor The Picklr filed for Chapter 11 bankruptcy late Friday after costly lease guarantees and rapid expansion created an unmanageable debt load.

The company filed its petition in the U.S. Bankruptcy Court for the Northern District of Texas as it seeks to reorganize its finances while keeping its locations open.

“Our clubs are open,” the company said in a public statement cited by the International Association of Pickleball and Padel Facilities, an industry trade group. “Our members are playing. Our franchise partners own and run their clubs, and they’re operating as usual.”

The parent company’s financial strain largely stems from backing early franchisee agreements. Founder and CEO Jorge Barragan acknowledged that serving as a lease payment guarantor for roughly 40 locations created an unmanageable financial burden.

“We signed, unfortunately, too many corporate guarantees that landed on the holding company, and that’s on us,” Barragan told Sports Business Journal. “I own it. Utilizing [Chapter 11 bankruptcy] is going to allow all of us to work with these landlords to figure out how to create profitable businesses.

“I think this is going to open up doors for a lot of people to renegotiate with the landlords and give people more success moving forward.”

Long popular in retirement communities, pickleball took off in 2020 during the Covid-19 pandemic as millions sought outdoor, socially distanced activities, eventually earning it the title of America’s fastest-growing sport for five consecutive years, according to the Sports and Fitness Industry Association.

That explosive demand sparked a rush by indoor court operators to build venues across the country. Barragan previously acknowledged in a LinkedIn post announcing Abby Olson as acting president and chief operating officer that the company “was growing faster than we could operate.”

Financial statements in the company’s franchise disclosure document showed The Picklr posted a net loss of $4.4 million on $10.3 million in revenue in 2025, with total liabilities reaching roughly $19 million by late March, as reported by Sports Business Journal.

A balance sheet dated August 31 attached to the petition listed approximately $915,000 in assets, $2.39 million in liabilities and $70,000 in bank accounts, according to the International Association of Pickleball and Padel Facilities.

Those liabilities included a $1.5 million line of credit, around $845,000 owed on a bank loan and seven contingent unsecured guaranty claims totaling about $783,000. The association noted these figures did not establish final liability or the full scope of lease guarantees.

To support the reorganization, an investor group led by Picklr franchisee and investor Tom Neale has stepped forward. The company stated the group had committed $4.5 million in financing subject to court approval. Sports Business Journal separately reported that the group committed $4.8 million to sponsor the reorganization.

“While everyone’s opinion is not completely the same, there are a good many franchisees within the system, like me and our group that we’ve put together, who believe in the brand, who believe in the business and believe there’s a viable future going forward,” Neale told the publication. “We’re convinced that the model works. It’s a matter of looking at some business realities and some headwinds that we collectively have faced and address those head-on.

“And what this restructuring allows us is to have some meaningful conversations with landlords and franchisees, and hopefully those conversations provide positive outcomes.”

David Johnson, chief executive officer of the trade group, noted that the inside backing provided stability.

“I am pleased to see an investor group, with inside knowledge and experience, step up with interim financing,” Johnson said. “Their belief in the company through a significant financial commitment should be reassuring to franchisees and Picklr members worldwide.”

Founded in 2021 before launching franchise operations in 2023, The Picklr has scaled to more than 70 domestic locations along with sites in Australia, Canada and Japan. The filing followed staff reductions, which Barragan described as temporary steps to prepare for the bankruptcy restructuring.

“Our goal is just to make sure that over the next 18 months to two years, as we start to see the shakeout happen, that we position our franchisees in the best position,” Barragan said. “Our ultimate goal is to position our franchisees to have a long runway to be there for the whole time that they’ve signed their leases.”

The bankruptcy comes amid broader industry questions surrounding high real estate costs, aggressive projections and fast-paced growth in the indoor pickleball sector.

The trade association stated that while broad demand for the sport remained intact, the filing highlighted the necessity of disciplined facility economics.