Citing Lack of Performance, Major Organic Fast Food Chain, Garden Fresh files for Bankruptcy
Recently, Garden Fresh Restaurant Corp., one of the largest organic chain restaurant companies in the U.S., announced that it had filed for Chapter 11 bankruptcy protection. According to The Wall Street Journal, the corporation that also runs the Souplantation and Sweet Tomatoes restaurant chains plans to continue operations when it emerges from the bankruptcy process.
Garden Fresh’s financial pressures prove too much
The company cited in its bankruptcy documents that its restaurant chain locations have struggled to remain profitable in recent years. Garden Fresh claimed that its recent lack of performance is due to a larger market trend by which restaurant chains, particularly those specializing in organic food, have experienced financial pressures in recent years.
In fact, according to National Restaurant News, the company is now the ninth “fast casual” restaurant chain corporation since late last year to seek bankruptcy protection. As a result, sales revenues have dropped. Sweet Tomatoes’ sales slipped $187.2 million last year, down from $192.1 million in 2014. On its court papers, Garden Fresh listed liabilities and assets from between $1 million and $10 million.
Garden Fresh’s restructuring plan
The reorganization plan calls for Garden Fresh to sell its remaining assets to its lenders and close around 30 of its underperforming locations. In turn, the company has also reached deals with primary and second lien lenders which will substantially reduce Garden Fresh’s debt load.
“Garden Fresh will operate our business as usual, and we remain focused on providing fresh, wholesome food and great service to our guests,” Morberg stated. “By improving our capital structure through this restructuring, we’ll be able to accelerate the changes underway to refresh our restaurants and build a strong future.”
Are you considering filing for bankruptcy? Would you like to discuss the matter further? If so, please contact me, Joel Glucksman, at 201-806-3364.
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