The owner of Souplantation and Sweet Tomatoes plans to declare bankruptcy

Garden Fresh Restaurants has hired bankruptcy counsel and says it sees “no way to operate” given FDA recommendations that buffets not open.
Photograph courtesy of Garden Fresh Restaurants

The owner of buffet brands Souplantation and Sweet Tomatoes plans to file for federal bankruptcy protection and could close all 97 of its locations permanently, the company’s CEO said Thursday.

In an interview with Restaurant Business, CEO John Haywood said he sees no “viable way to reopen” the chain’s restaurants, given federal recommendations that buffets and salad bars not reopen as states start easing requirements on dine-in service.

San Diego-based Garden Fresh is known most for its 50-foot salad bars.

“We could have overcome a lot of obstacles,” Haywood said. “The inability to reopen our service model for some time really doubles the challenge.”

Garden Fresh has spent the past eight weeks looking at “every potential modification” of its service model to enable the chain to reopen its restaurants. “It just doesn’t work with the type of high-quality, fresh product we serve,” he said. “We don’t see an option at this time.”

While he wouldn’t completely rule out a reopen under a new model, Haywood said, “We don’t see a viable way to reopen.”

That’s a disappointing result for a company that had been on the comeback trail since emerging from bankruptcy in 2017. Perpetual Capital Partners, a Washington, D.C.-based investment firm, acquired the chain that year.

Before Garden Fresh temporarily shuttered its restaurants in March, the company had enjoyed three straight years of consistently increasing guest counts. The chain was in the middle of remodeling all of its locations and was planning to build two to four units next year.

It would have been the first new units for the company in seven years.

The company does about $250 million in sales a year, serves 25 million customers and has 2 million loyalty program members.

“That’s the real shame,” he said. “Things were great. The company had new ownership. We had substantial improvement in all of our guest scores. We had a great owner, long-term owner, that made a tremendous investment in the concept. Very regrettable.”

The company has 4,400 employees who were furloughed in March when Garden Fresh temporarily closed its restaurants. As states reopened, they have largely followed federal regulations that prevent traditional buffet service.

For buffet concepts, the regulations that buffets not be allowed to operate make the coming months a challenge, at best.  

Because their service models are built on people dining in and serving themselves, takeout has been less of an option outside of pizza buffet concepts. Many of them have therefore closed their doors altogether and hoped for the best.

Yet even while closed, these restaurants lose money. Haywood said the company has been burning through more than $1 million per week. “As much as we shut this off, there’s no way to stop the accrual,” he said.

“Given FDA regulations, we don’t think we could reopen any time this year,” Haywood added. “You start thinking about both the expense to maintain it and reopen it, and it becomes difficult to imagine.”

The company considered various options, such as table service, but the Souplantation and Sweet Tomatoes model doesn’t work in that format. And it’s difficult to police social distancing in a concept in which people gather at a single location where food is served.

“The magic of our concept is people being able to customize and control their own experience,” Haywood said. “To convert it into basically a table-service restaurant doesn’t work. Even if we serve people behind the buffet, it doesn’t work. People congregate. You’re serving them.

“We didn’t see a viable way with the regulations to reopen.”

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