Garden Fresh Restaurants, parent of buffet-style concepts Souplantation and Sweet Tomatoes, filed for bankruptcy Thursday after shutting down all 97 of its restaurants.
The Southern California-brand opted for a Chapter 7 filing, meaning it will surrender its assets and close permanently.
The chain reported assets between $50 million and $100 million and liabilities between $50 million and $50 million and $100 million.
Garden Fresh was a self-service chain known for its 50-foot salad bar, soups, pastas, breads, and desserts. However, given the COVID-19 pandemic and increased safety concerns from consumers, the company found it difficult to continue operations. The FDA recommended that restaurants discontinue operations “such as salad bars, buffets, and beverage service stations that require customers to use common utensils or dispensers.”
“As you may have heard, we are unable to re-open our 97 Souplantation and Sweet Tomatoes restaurants due to the COVID-19 pandemic,” the company wrote online. “The outpouring of love on social media has been overwhelming and we are so grateful to all of the sweet memories you have shared. We would like to thank our 4,400 team members for their dedication and love they have shown to our local communities. We will miss you tremendously and wish you the best of luck.”
The brand considered applying for a Paycheck Protection Program loan, but decided against it. Large chains like Potbelly, Ruth’s Chris Steak House, and J. Alexander’s were heavily criticized for applying and receiving the forgivable loans. The federal government later released guidance that discouraged big corporations from applying. Those that accepted the loans prior to the new rules were essentially told to return the funds or face consequences.
Pre-COVID-19, traffic was rising and stores were undergoing renovations. But sales plummeted as dining rooms were asked to close. CEO John Haywood said there weren't any feasible options for takeout and there wasn’t any path to reopening. Garden Fresh was burning more than $1 million per week, with annual sales reaching $250 million per year.
Robert Allbritton, chairman of Perpetual Capital Partners, told the San Diego Tribune that he wrote a $2.5 million check over a month ago to help cover payroll for the approximately 4,400 employees.
The first Souplantation was founded in 1978. After expansion throughout the 1980s, Sweet Tomatoes was added in 1990. Sun Capital Partners backed Garden Fresh in 2005, but in October 2016, the restaurant chain filed for bankruptcy. Perpetual Capital Partners acquired the brand, but terms weren’t disclosed at the time.
Garden Fresh joins a growing list of restaurant brands that have filed bankruptcy amid the crisis. Among those that filed are FoodFirst Global Restaurants, Sustainable Restaurant Holdings, and TooJay’s Deli. It was also reported that California Pizza Kitchen was looking to restructure its debt to avoid bankruptcy.