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Financing

The parent of Old Country Buffet and Furr’s declares bankruptcy

Fresh Acquisitions operates a half-dozen mostly buffet brands, has closed all but six Tahoe Joe’s restaurants and plans to focus on that brand as well as a redesigned Furr’s concept.
Buffets LLC bankruptcy
Photograph: Shutterstock

Fresh Acquisitions LLC and Buffets LLC declared Chapter 11 bankruptcy on Tuesday, more than a year into a pandemic that proved especially difficult for its six restaurant chains, five of which specialize in buffet-style service.

Yet it is also the fifth time the company’s various chains have sought federal debt protection since 2008, thanks to heavy debt loads, cost-cutting and a consumer that has shifted away from all-you-can-eat concepts.

The company, owned by the now-defunct FMP Management, has closed the vast majority of its restaurants. Fresh and Buffets entered the pandemic with 90 restaurants under the Tahoe Joe’s, Old Country Buffet, HomeTown Buffet, Ryan’s, Fire Mountain and Furr’s brands.

It has closed all but six of the Tahoe Joe’s steakhouse locations.

FMP Management, which acquired all the brands in an aggressive bid for low-priced restaurant chains in 2014 and 2015, “ceased operations” in June and is also in bankruptcy.

In January, a San Antonio-based restaurant operator VitaNova Brands began providing management services to the buffet concepts. VitaNova has provided the company with financing to get it through the bankruptcy process.

Fresh Acquisitions plans to run a sale process that will include selling Furr’s intellectual property, according to court documents, which “provides flexibility to the buyer and allows the brand to be reopened in the future, if desired.”

In a statement on Tuesday, VitaNova CEO Jason Kemp said the focus will be on Tahoe Joe’s and Furr’s AYCE Marketplace, a redesigned version of the brand that was revealed back in August. “We are looking forward to emerging from bankruptcy as a stronger operator with a focus on the Tahoe Joe’s and Furr’s AYCE Marketplace banners,” Kemp said. “These great brands serving great food will create a platform for future growth.”

It’s uncertain exactly how many locations will reemerge in a post-bankruptcy environment, or even whether any of the other four brands in their entirety will emerge at all.

According to court documents, FMP management has $13.5 million in debt.

The pandemic, however, has been particularly tough on the company’s liquidity position. The six Tahoe Joe’s together generated just $21 million per year in revenue before the pandemic.

“The precipitous decline in sales at the restaurants resulting from occupancy restrictions and the banning of family-style buffet dining forced the companies to take extraordinary steps, including the closing of multiple locations,” Kemp said.

Still, it’s been a brutal 13 years for those buffet brands, which trace their history to the formation of Buffets Inc., in 1983. In 2006, that company merged with Ryan’s to create a 650-unit buffet behemoth just two years before the recession hammered much of the industry. The company declared bankruptcy in 2008.

It did so again in 2012. It was sold to FMP in 2015 and then declared bankruptcy one year later.

Furr’s, meanwhile, filed for bankruptcy in 2014 and was then sold to FMP in 2015.

Along the way the various brands closed stores aggressively. What is now known as Buffets LLC had 300 locations when FMP acquired the company in 2015.

The pandemic has indeed been brutal on buffet brands. The owner of Souplantation and Sweet Tomatoes opted to liquidate back in May, for instance, while the two largest franchisees in the Golden Corral system have also sought debt protection after the pandemic made it difficult to offer buffet dining. The largest of those franchisees is hopeful that sales will rebound strongly coming out of quarantine.

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