Financing

Fig & Olive declares bankruptcy

The upscale Mediterranean chain was pushed over the edge by the coronavirus crisis but had been in financial trouble stemming from a foodborne illness outbreak since 2015, according to court documents.
Photo courtesy of Fig & Olive

Fig & Olive, a nine-unit upscale Mediterranean concept that was struggling pre-coronavirus, is the latest restaurant chain to declare bankruptcy amid the pandemic.

Seeking Chapter 11 protection will allow the chain to reorganize, and untangle itself from some of its leases, while continuing to operate some of its restaurants, according to a declaration filed late last week in U.S. Bankruptcy Court in the Southern District of New York.

Fig & Olive, which opened its first unit in 2005 and has nine restaurants in five markets, is seeking to get out of four of its leases as part of the bankruptcy proceedings, while also asking to pay 25% of current monthly rent obligations, citing coronavirus-related hardships.

Even before the pandemic, the chain had been in financial trouble following a salmonella outbreak in 2015 at two of its stores.

“The negative press triggered a downfall in revenue,” according to the bankruptcy declaration.

In 2017, Guillaume Fonkenell became majority owner of the brand, as part of a leadership reorganization that sought to get the chain on solid footing again.

“Since in or around 2015, and ongoing to today, the debtors have been plagued by lawsuits both related to the outbreak, as well as a series of frivolous employee lawsuits,” the filing states.

Amid stay-at-home orders in March, the company closed all of its restaurant sand laid off or furloughed more than 700 employees. Fig & Olive retained 34 employees, at reduced salaries, and is currently operating just four of its stores at reduced capacities.

Fonkenell will consult with restaurant managers about which units could be viable and will loan the brand money to foot the reorganization bill, according to the documents.

The pandemic has forced a number of restaurant operators to declare bankruptcy in recent weeks, including NPC International, the largest Wendy’s and Pizza Hut franchisee, as well as Chuck E. Cheese, Twisted Root Burger Co., Souplantation and Sweet Tomatoes, and others.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Despite their complaints, customers keep flocking to Chipotle

The Bottom Line: The chain continued to be a juggernaut last quarter, with strong sales and traffic growth, despite frequent social media complaints about shrinkflation or other challenges.

Operations

Hitting resistance elsewhere, ghost kitchens and virtual concepts find a happy home in family dining

Reality Check: Old-guard chains are finding the alternative operations to be persistently effective side hustles.

Financing

The Tijuana Flats bankruptcy highlights the dangers of menu miscues

The Bottom Line: The fast-casual chain’s problems following new menu debuts in 2021 and 2022 show that adding new items isn’t always the right idea.

Trending

More from our partners