True Food Kitchen, a health-food focused restaurant chain that counts Oprah Winfrey among its investors, has filed bankruptcy after struggling with management turnover and lingering effects of the Covid-19 pandemic.
The company said in court papers that it closed a dozen locations after filing Chapter 11 protection on Oct 4 and will seek to either recapitalise or sell the business.
The chain said it grappled with “significant management turnover, which resulted in frequent changes to expansion strategy, brand direction, and menu offering”.
The chain has sought permission to end leases in Miami, New Jersey, Southern California, Columbus, Ohio, New Orleans, Chicago, Bethesda, Maryland, Reston, Virginia, Scottsdale, Arizona and Long Island, New York.
True Food Kitchen’s advisers have already entered into separate transactions for certain unexpired leases, chief restructuring officer Nathan Cook said in a court filing on Oct 5.
Winfrey decided to invest in the restaurant and joined the board after dining in its Palo Alto, California, location, former True Food Kitchen chief executive officer Christine Barone said in a 2018 interview with Bloomberg.
Barone now leads the Dutch Bros Coffee chain; Jeff Chandler was appointed CEO of True Food Kitchen in July.
In 2022, True Food Kitchen announced a US$100 million (S$127.9 million) investment round led by new investors HumanCo and Manna Tree and support from Centerbridge Partners.
A True Food Kitchen spokeswoman said on Oct 5 that Winfrey remains a minority investor and that Centerbridge is no longer a shareholder in the company.
Like most restaurants, Covid-19 era lockdowns significantly impacted True Food Kitchen at a time it was expanding.
To offset the loss of in-person dining, the chain used some of its locations as “ghost kitchens” and opened one off-site kitchen for delivery service, only, Cook said in the filing.
The strategy, which has since ended, impaired staffing and the dining experience at its restaurants, he said.
A True Food Kitchen lawyer told a bankruptcy judge on Oct 5 that the cyclospora outbreak in July “also didn’t help”.
True Food Kitchen has lined-up a US$20 million Chapter 11 loan to help fund operations during the bankruptcy. The financing is being provided by an affiliate of HumanCo.
The brand was founded in 2008 by wellness author Dr Andrew Weil, who has appeared on Oprah’s talk-show, and restaurateur Sam Fox.
True Food Kitchen’s remaining locations are open and serve items that are cooked without seed oil, grass-fed beef, pasture-raised eggs and antibiotic-free chicken, according to court papers. BLOOMBERG
