A California restaurant chain now files an unexpected bankruptcy, leaving its 1,147 employees deep in uncertainty.
One Table Restaurant Brands, the parent company of the 24-unit chain Tender Greens and the 15-unit chain Tocaya, filed for Chapter 11 bankruptcy protections Wednesday, court documents show.
One Table was created in 2021 after the COVID-19 devastated Tender Greens and Tocaya.
The unusual business combination was intended to “provide a leveraged platform of shared people resources and supply chain synergies,” according to a declaration in support of the company’s bankruptcy filed by CEO Harald Herrmann on Thursday.
The company was also impacted by high debt following the business combination, as well as a loss of traffic and high commission rates for third-party delivery, according to Herrmann.
Both brands never saw their sales volumes recover from COVID-19, with Tender Greens average unit volume falling from $3.4 million in 2019 to $2.9 million in 2023, a partial recovery from its 2020 low of $2.3 million.
Tocaya’s AUV slid from $3.4 million to $2.1 million in 2023, its lowest AUV including 2020, Herrmann said.
In addition to falling sales, four-wall profits slid at both brands, from 16% at Tender Greens and 13.1% at Tocaya before the pandemic to a present level of 9.4% and 1.6%, respectively.
When the brands combined, both were carrying debt used to finance expansion between 2017 and 2019, according to Herrmann’s declaration.
That debt was consolidated as part of the combination, but became unsustainable as profits and sales fell and interest rates increased.
The interest rate on the company’s $28 million credit agreement rose from 11.6% at the time of the merger to 15.9% today.
From 2021 to 2023, the chains were part of an exclusive sales agreement with Uber Eats and Postmates, which included a sales volume guarantee; to meet that guarantee the delivery platforms, Herrmann alleges, discounted to such an extreme degree that it was cheaper to order delivery than to eat in one of the restaurants.
The company also cited general inflationary pressures and the impact of the FAST Act on California labor markets.
While the law does not apply to One Table’s brands — neither are large enough to be requires to pay $20 an hour — restaurant executives predicted at the time of its passage that smaller chains would need to raise wages to remain competitive.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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