Garden Fresh Restaurant Corp., the parent company of buffet brands Souplantation and Sweet Tomatoes, is exploring a bankruptcy filing as the company does not see a “path” to reopening restaurants amid the COVID-19 pandemic, CEO John Haywood said.
The San Diego-based company, owned by Washington, D.C.-based private equity firm Perpetual Capital Partners, temporarily closed its 97 restaurants, 12 commissary kitchens and two distributions centers when stay-at-home mandates swept the nation in March. Roughly 4,400 employees, including Haywood, have been furloughed.
Haywood, in a phone interview Thursday with Nation’s Restaurant News, said the company has spent the last eight weeks “exploring every possible option” for the company.
“Our problem is this: we’re a buffet concept,” Haywood said.
He added: “Anything that’s communal, eater-tainment or buffet — anything that brings people together in groups is going to be challenged” to reopen — even in states where restrictions have been lifted, such as Georgia.
Georgia, where Garden Fresh has four buffet restaurants in Atlanta, was one of the first states to ease restrictions for restaurants. But when Georgia — criticized for reopening businesses too soon — did not allow buffets to reopen, Haywood said he didn’t see a “path” to reopening anywhere else.
“It was the canary in the mine shaft,” he said.
Haywood said it’s “impossible to keep the company viable” with jurisdictions not allowing buffets to reopen.
In March, the company explored takeout and “modeled a number of different options” to keep restaurants afloat during the pandemic.
“It simply doesn’t work,” he said.
The company has been losing about $1 million a week since they temporarily closed restaurants in mid-March. Haywood said that number would have escalated if they tried to operate a takeout scenario due to the added labor and food costs.
The company, founded in San Diego in 1978, was bought out of bankruptcy by Perpetual a few years ago. Haywood, appointed in 2017, had been leading a turnaround that included remodeling stores and growing units for the first time in years. Growth was targeted in California, the company’s core market.
It was a “good run” with positive guest counts, he said.
Annual sales reached $250 million a year.
“We were a profitable, vibrant company,” he said. “Then, comes coronavirus.”
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