Così Inc., a legacy fast-casual that has grappled with store closures in recent months, filed for bankruptcy protection Monday. It’s the second time Così has declared Chapter 11 since 2016.
The brand shuttered 30 restaurants in December and said it’s increasing focus on catering, “all to better align with current customer dining trends, further improve guest experiences, and enhance its financial performance.”
According to filings, Così owes $30.7 million in secured debt and $6 million to trade creditors. Additionally, it could be on the hook for $2.5 million in damages on leases at closed restaurants.
The company said 2020 is off to a solid start, with increased sales in still-open locations and catering. Così filed for reorganization, it said, to shed “certain legacy costs, further business streamlining and, possibly, select location moves.”
“Così expects to emerge from Chapter 11 as a stronger version of itself, with a greater focus on its burgeoning catering business,” the company said in a statement.
Così retained Jason Fensterstock as chief restructuring officer “to assist with the development and implementation of its business plan and the associated cost cutting and initiatives which are well underway and include the opening of several new locations in the first half of 2020.”
Così claimed between 1–49 creditors and said it has assets between zero and $50,000, and liabilities between $10 million and $50 million.
Gordon Food Service posted the largest unsecured claim at $1,226,531.000. U.S. Foods follows at $170,000. Both are in trade debt.
Così last filed for Chapter 11 in September 2016, listing $31.2 million in assets and $19.8 million in debts. At that point, the chain closed 29 of its then-74 company stores and cut 450 jobs. The company’s remaining 31 franchised stores stayed open. Così peaked at 151 locations in 2008.
The fast casual appeared back on the growth path earlier in 2019. In August, Così announced a Burlington, Massachusetts, location as the company’s 10th area store. By then, there were 48 company-run and 17 franchises operating in 11 states, the District of Columbia, and Costa Rica.
Late in the year, however, a report from the Boston Business Journal said the company shuttered more than two dozen of its U.S. locations leading up to the New Year, including eight in its home state of Massachusetts. That left Così with just two Massachusetts restaurants and fewer than 30 nationwide.
Today, the company employs 237 people—nearly 75 percent part-time. And Così runs 13 locations and three off-site kitchens dedicated to catering. There are also 16 franchise units.
At the beginning of the decade, there were 145 restaurants in 18 states, the UAE, and the District of Columbia.
Così first opened in Paris, selling the rights to the restaurant later to two American brothers who opened the first U.S. location in 1996. It emerged from the 2016 bankruptcy in 2017 with AB Value Management and Ohio investment firm Milfam LLC as owners. They picked up the brand for $10 million in cash and debt forgiveness.
Following the death of Milfam’s principal in early 2018, according to The Wall Street Journal, the firm “decided to cease all of its funding support to the company and sought to extricate itself from its investment in Così.” AB Value bought out Milfam’s stake but the company was left cutting expenses.
According to a declaration from general counsel Vicki Baue this led to negative customer experience changes and sank foot traffic amid heightened competition in the sector.
