In late 2019, the company began facing multiple controversies, including financial mismanagement leading to insolvency and allegations of using deceptive marketing practices to sell unprofitable franchises as quickly as possible.

[7] According to the magazine's reporting, Burgerim CEO Oren Loni was a "salesperson" but "not a businessperson" who "could sell a ketchup popsicle to a woman in a white suit",[7] in the words of one ex-Burgerim employee.

Current and former franchisees who were interviewed claimed that Burgerim focused only on selling additional franchises as quickly as possible, and severely underrepresented the costs of building out and operating the restaurants.

Burgerim thus "operated much like a pyramid scheme", in which it was forced to open yet more and more new franchises indefinitely, in order to merely stay afloat, by collecting the initial startup fee.

[7] In February 2022, the U.S. Attorney General filed a lawsuit against Burgerim and its founder Oren Loni in the U.S. state of California, citing breaches of the Federal Trade Commission Act.