Souplantation and sister buffet chain Sweet Tomatoes are planning to be sold after operator Garden Fresh Restaurants filed for Chapter 11 bankruptcy protection.
Garden Fresh said 20 to 30 restaurants would be closed, pending bankruptcy court approval, as part of the bankruptcy reorganization.
A deal has been tentatively inked to sell the brands to second-lien debtors, Garden Fresh said in a statement.
It forecast that the chains would emerge from bankruptcy by Dec. 5. No reason was given for that specific date.
“Garden Fresh will operate our business as usual, and we remain focused on providing fresh, wholesome food and great service to our guests,” CEO John Morberg said in a statement. “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.”
The twin brands, which together extend to 125 locations in 15 states, are the latest to be pushed into bankruptcy by a difficult restaurant environment. Metrics show that traffic is declining, even as disposable income rises, suggesting that consumers are cooking more at home and turning to such alternatives as meal kit services like Blue Apron.
Souplantation and Sweet Tomatoes had been undergoing a systematic renovation program and brand refresh, but the system was hampered by older stores with bad leases and weak sales. The company was also loaded with debt.
The buffet segment has been one of the hardest-hit markets in the downturn. Earlier this year, multibuffet operator Ovation Brands filed for Chapter 11 protection from creditors for its five brands, which include HomeTown Buffet, Old Country Buffet and Ryan’s. The chains encompassed some 300 stores, many of which abruptly closed.
Garden Fresh is owned by Sun Capital Partners, the private-equity firm that also has controlling interests in Friendly’s, Boston Market and Smokey Bones, among others.
Garden Fresh was founded in 1978 in Southern California. As it expanded beyond its home base, the company adopted the name Sweet Tomatoes as a better way of introducing the updated buffet concept in new markets.
Souplantation and Sweet Tomatoes feature 45-foot-long salad bars and hot stations featuring pizza, soups and baked goods. Sun Capital says that 1.2 million people belong to the brands’ joint loyalty program.