An increasing number of businesses across varying sectors have recently been forced to file for Chapter 11 bankruptcy, with reasons including increased labor costs, high debts and a lack of footfall.
The latest business to file a Chapter 11 bankruptcy report is One Table, the parent company of Tender Greens and Tocaya. But what has forced the popular chain to go under?
Tender Greens Is a Healthy Fast Food Restaurant
Tender Greens was created as a healthy fast-food restaurant. People love fast food because it is quick and simple, but they don’t love how unhealthy it is. This is where Tender Greens comes in.
It focuses on sustainability and is a fairly new restaurant, having opened its doors in 2006. However, not enough people have been paying it a visit for multiple reasons, the pandemic being one, and it could now have to close its doors.
New York Locations Have Already Been Closed
Tender Greens previously had locations in New York. However, these locations closed in 2021 due to the pandemic. Many restaurants struggled during the pandemic, and Tender Greens was one of them.
Even though California restaurants have been able to stay put for the last few years, the latest news of the Chapter 11 bankruptcy filing could jeopardize those.
The Creation of One Table
One Table was only created in 2021 and happened as a result of the COVID-19 pandemic. Many industries and businesses were affected by this, including Tender Greens and Tocaya.
The business was created to bring the two restaurants together to try to save them. But now that the parent company has gone under, people are questioning whether there is hope for the popular chain.
What Happened After One Table Was Created?
Due to the impact the COVID-19 pandemic had on Tender Greens and Tocaya, One Table inherited quite a few issues from these two restaurants that it hasn’t been able to fully deal with.
This included the debt associated with the businesses’ merger, including a loss of traffic and the high commission rates required by third-party delivery.
COVID-19 Sales Volumes Have Been Recovering
The difference between sales volumes before, during and after the pandemic is astounding in all businesses. Both Tender Greens and Tocaya suffered greatly during the pandemic but had been on the way to recovery.
The average unit volume for Tender Greens was $3.4 million in 2019, which then dropped to $2.3 million in 2020. It has since gone up to $2.9 million in 2023. Tocaya’s average unit volume was $3.4 million in 2019 and then dropped to $2.1 million in 2023, which is its lowest volume.
One Table’s Liabilities and Assets
One look at the difference between One Table’s liabilities and assets will show how badly in debt the company was and that filing for bankruptcy was its only option to get out of it.
The estimated liabilities for the company are between $10 and $50 million, whereas it had less than $50,000 in assets. As the company plans to sell up, this will be done through an auction.
$3 Million in Financing Needed
According to One Table Restaurant Brands LLC, the company needs $3 million in financing to continue operating as normal as possible until it can find a new buyer to take over.
Over 1,000 employees are said to be affected by the news and hope that a new buyer is found soon in the hope that they can keep their jobs amid a rising cost of living.
Historic Companies Filing for Chapter 11
It’s not just newer companies being forced to file for Chapter 11 bankruptcy, as companies that have been around for over a century are now in the same boat.
A 116-year-old historic grocery change, Sickles Market in New Jersey, has been forced to file the motion due to $5.2 million in debt. However, while the doors remain closed on the historic market, there is still hope they could reopen again.
California Minimum Wage Increase
One Table filed for Chapter 11 bankruptcy partly because of the FAST Act in California, which affects the labor market. However, this law doesn’t apply to One Table.
The FAST Act raises the minimum wage for fast food workers to $20 in California, but only for chains with a certain number of restaurants. One Table doesn’t meet this threshold. However, it was under pressure to raise the wages for its staff to remain competitive.
No Restaurants Will Be Closed
For those worried that this will mean their favorite restaurants will close, One Table has assured them not to worry as there are currently no plans for any closures to happen.
The company has 39 restaurants, 24 Tender Greens and 15 Tocaya, and employs over 1,000 people between them. It is business as usual for all 39 of them, but just because there are no current plans for restaurants to close doesn’t mean that it won’t happen.
Bankruptcy Is the Only Option
No business wants to file for bankruptcy, but One Table feels that it is the only option to try to help the business stay afloat and avoid letting any of its staff or customers down by being forced to close.
However, the company believes filing for Chapter 11 bankruptcy will allow them to restructure their debt and prevent employees from losing their jobs.
