Roti, the Mediterranean fast-casual chain, on Friday said it had declared Chapter 11 bankruptcy, joining a parade of summertime restaurant chain restructurings.
The Chicago-based chain said it plans to use the Chapter 11 process to find new investors or a buyer as it reorganizes its finances.
The company says that it hopes to ensure that its locations in Chicago, Minneapolis and Washington, D.C., will remain open.
The move follows a tough few years for the chain, which finished 2023 with 20 locations, about half the number it operated before the pandemic, according to data from Restaurant Business sister company Technomic.
Many of the closures came in 2021, as business to urban areas where many Roti restaurants are located, was slow to return. The chain closed a third of its restaurants that year.
But Roti closed four restaurants last year, too. System sales declined 12% to $35.6 million, according to Technomic.
Roti is hardly alone. Sixteen restaurant chains have declared bankruptcy this year and several more are believed to be near that stage. Hooters is believed to be close to such a filing. The fast-casual burger chain BurgerFi just this week hired a chief restructuring officer, often a precursor to such a move.
Numerous other chains are restructuring out of court, meanwhile, as lenders and company owners hope to avoid the time and expense of court-ordered restructurings.
Many restaurant chains have struggled to get finances in order coming out of the pandemic as costs increased, profits weakened and the cost of debt increased—assuming it is available at all.
“After careful consideration, filing for bankruptcy was the best way to address our challenges, including financial performance, higher costs, mixed location performance and tough market conditions,” CEO Justin Seamonds said in a statement.
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