Souplantation Parent Closes All Restaurants, Engages Bankruptcy Talks

    CEO doesn’t see a path to reopening given the company’s buffet-style operation.

    Storefront of Souplantation.
    Wikimedia Commons/John Pearson
    The first Souplantation was founded in 1978.

    Garden Fresh Restaurants, parent of Souplantation and Sweet Tomatoes, announced Thursday that it’s permanently closing all of its restaurants, clearing the way for a possible bankruptcy filing.

    CEO John Haywood said the 97-unit brand spent several weeks trying to reopen, but faced standards from health departments that wouldn’t allow Souplantation to normally operate. Garden Fresh is a self-service chain known for its 50-foot salad bar, soups, pastas, breads, and desserts. But 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 fears grew about the spread of COVID-19, people moved away from the buffet-style company and sales plummeted quickly. Haywood said that a takeout option didn’t work and that he sees no path to reopening restaurants.

    Robert Allbritton, chairman of Perpetual Capital Partners, the firm that bought Garden Fresh in bankruptcy three years ago, told the San Diego Tribune that the number of customers was rising in the past two years. The company was in the midst of renovating its restaurants, as well. But amid the pandemic, units were forced to shut down and money began to run out. Garden Fresh burns more than $1 million per week, with annual sales reaching $250 million per year.

    The chairman told the outlet that Garden Fresh considered applying for a forgivable loan under the Paycheck Protection Program, but the group felt it wasn’t appropriate. Allbritton wrote a $2.5 million check over a month ago to help cover payroll for the approximately 4,400 employees. He indicated that the company is likely headed toward bankruptcy.

    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.

    “The regulations [from the FDA and health departments] are understandable, but unfortunately, it makes it very difficult to reopen,” Haywood told the San Diego Tribune. “And I’m not sure the health departments are ever going to allow it. We could’ve overcome any other obstacle, and we’ve worked for eight weeks to overcome these intermittent financial challenges but it doesn’t work if we are not allowed to continue our model.”