An unexpected restaurant is now at high risk of closures after its parent company abruptly filed for bankruptcy protection.
Tender Greens, a southern California-based salad restaurant chain has sparked mass fears over closures as its parent company has filed for bankruptcy.
The chain has 24 locations in the South of the state and the Bay Area, according to ScrapeHero.
Tender Greens and its parent company filed for Chapter 11 bankruptcy on July 17 and 18.
The chain’s owner, One Table Restaurant Brands, also owned the Mexican restaurant business Tocaya.
A boss at the parent company said its customer footfall was impacted by Covid and never recovered, according to Restaurant Dive.
Most of Tender Greens’ locations were in downtown Los Angeles, which was very reliant on office workers.
One Table Restaurant Brands’s CEO, Harald Herrmann, blamed the increased use of delivery apps and the commission taken from those orders.
The CEO said around 30-40% of orders are made through these apps.
“A commission rate of between 15 to 18 percent depending upon the provider, coupled with related packaging costs of four percent, make these sales less profitable,” he said in the bankruptcy filing.
“Passing this entire cost along to the consumer is not possible as it would have a negative impact on demand for the Restaurants.”
He also cited California’s $20-an-hour minimum wage.
The legislation, which was passed on April 1, has applied to fast-food restaurants with more than 60 locations.
Although Tender Greens has fewer branches, the CEO said his company had to raise wages to compete with other businesses for staff.
Herrmann also blamed issues that came with rising inflation.
The chain has not confirmed any closures yet but has hoped it could be bought out in time.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
A beloved grocery chain now confirms unexpected closures across the Northeast taking place by the end of the year.
Grocery chain Stop & Shop has announced that a total of 32 underperforming locations will shutter in the U.S.
The company said the select stores across the Northeast will be closed before the end of the year.
Stores in New Jersey, Massachusetts, New York, Connecticut, and Rhode Island will close by November 2.
In May, the company announced the coming store closures.
“Stop & Shop has evaluated its overall store portfolio and made the difficult decision to close underperforming stores to create a healthy base for the future growth of our brand,” company president Gordon Reid said, per a July 12 press release.
The company’s president added that the closures were essential “to create a healthy base for the future growth of our brand.”
Fortunately, employees will be offered other positions within the company, according to a press release.
The grocery outlet first opened in 2014 and currently has around 400 stores and 60,000 employees, per Fox affiliate KRLD.
Stop & Shop is owned by Ahold Delhaize which also owns Food Lion, Giant Food, and Hannaford.
Which grocery stores are closing?
In New Jersey, 10 locations will close, while only seven will close in New York.
Rhode Island will see two closures and Massachusetts, the home of the first location, will be closing eight.
Five stores will also be closing in Connecticut.
As other chains such as Walmart and Amazon join the grocery business, it has pushed traditional grocery stores out of view, reports The-Sun.
Stop & Shop hopes the closure of underperforming stores will create “future growth” for the company.
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