Too good to be True.
Celeb-backed clean eating restaurant True Food Kitchen announced this week that they are filing for Chapter 11 bankruptcy — citing $42 million in debt.
The staple of tony Southern California shopping malls and downtowns abruptly shrank its local footprint — suddenly shuttering stores in Century City, El Segundo and San Diego.
Other locations in Miami; Chicago; New Orleans; Bethesda, Maryland; Edison and Hackensack, New Jersey; Garden City, New York; Columbus, Ohio; and Reston, Virginia are gone as well, a spokesperson confirmed to the California Post.
Sunday, October 4 marked the last day of operation for those locations.
“True Food Kitchen is a pioneering brand with a distinctive position in wellness-driven dining, a loyal community of guests, and a mission that is more relevant than ever,” said Jeff Chandler, Chief Executive Officer of True Food Kitchen, in a written statement released on Monday.
“This process is the best path forward to simplify the business and focus on what we do best: delivering craveable, health-forward food and genuine hospitality. We are confident this step will help us build a stronger True Food Kitchen for the future.”
The trendy chain was founded in Arizona in 2008 and has been backed by Oprah Winfrey, who invested an undisclosed amount into the business in 2018.
True Food Kitchen told FOX Business that Winfrey remains a minority investor in the business — but does not have a representative on the company’s board, nor is she involved in True Food Kitchen’s management.
Just four years ago, the business raised $100 million from health-conscious investors including MannaTree Partners and Human Co., which is backed by Nick Jonas and wife Piryanka Chopra.
True Food Kitchen is now seeking a buyer “with the resources and mission alignment to support the brand’s future.”
They’ve also secured $20 million in debtor-in-possession (DIP) financing from HumanCo TFK IV to help the company remain liquid through the bankruptcy and sale process.
In court filings, the company cited multiple “operational challenges” as a cause for its financial difficulty, including significant management turnover, which resulted in frequent changes to expansion strategy, brand direction, and menu items.
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