Pet Supplies Plus franchisee IKPM Pet Supply files for Chapter 11 bankruptcy

IKPM Pet Supply LLC, a Texas-based franchisee of the Pet Supplies Plus chain, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. The petition, lodged on May 22, 2026, seeks to reorganise the company’s financial affairs while the Sugar Land store remains open for business.

Court documents disclose that IKPM Pet Supply holds assets valued between $100,000 and $500,000, with liabilities ranging from $1 million to $10 million. The filing identifies Customers Bank as the largest creditor, owed more than $1.07 million, followed by Ondeck, individual creditor Karthikeyan Patchamuthu, Chase, and Petronia Holdings.

The move comes just 10 days after PSP TS LLC, a Florida-based franchisee of the same brand, filed for Chapter 11 protection in Tampa. That filing, submitted on May 12, similarly listed assets between $100,000 and $500,000 and liabilities between $1 million and $10 million. Both franchisees have not provided specific reasons for their insolvency proceedings.

Industry data suggests a divergence between macroeconomic trends and individual retailer performance. According to the American Pet Products Association’s 2026 State of the Industry Report, pet industry sales rose 3.7% in 2025 to reach $158 billion. Sales are projected to grow by a further 4.4% in 2026, although two percentage points of that growth is attributed to inflation.

Despite the sector’s financial strength, reports indicate that rising labour, product, and lease costs are squeezing margins for brick-and-mortar operators. IKPM Pet Supply entered its franchise agreement in April 2021, shortly after Franchise Group Inc. acquired Pet Supplies Plus from Sentinel Capital Partners for $700 million. While Franchise Group itself filed for Chapter 11 in November 2024 and divested its stores, the individual franchisees have faced distinct financial headwinds. The franchisor has not filed for bankruptcy.