Veggie Grill, the nation’s largest entirely plant-based restaurant chain, has closed 12 restaurants, or about 40% of its unit count, in an effort to revitalize and refocus amid increasing competition.
In an Instagram post on Tuesday, the company offered an explanation, describing the move as a “right sizing” of the portfolio.
“The restaurant business is hard, and running a chain of plant-based restaurants is no exception,” said co-founder and CEO T.K. Pillan in the post. “And the reduction in office lunch traffic due to hybrid work schedules necessitated that we right-size our portfolio of restaurants.”
The closures have occurred over the past few months and included locations of secondary brand Stand-Up Burgers. The company did not disclose the specific locations that have shuttered, and officials also would not say how many workers were impacted.
Still remaining, however, are 17 units in California, Oregon, Washington state and Massachusetts, which will focus on rejuvenation, the company said.
“We are embarking on a new chapter for Veggie Grill in our journey that began nearly 20 years ago,” Pillan wrote. “Sometimes it’s necessary to take a step back to make a bigger leap forward.”
There has also been a change in the capital structure for the brand, and private-equity firm Brentwood Associates—which first invested in Veggie Grill in 2011—is no longer the majority owner, Pillan said in an interview, though he could not share details.
In February this year, Veggie Grill launched franchising. But Pillan said the franchising effort will be put on hold and relaunched in the second quarter next year, “after we complete this period of focus on stabilizing and rejuvenating Veggie Grill.”
When it was founded in 2006, with a first unit in Irvine, Calif., the Los Angeles-based Veggie Grill was one of the first in the fast-casual segment to attempt a vegan menu in the limited-service space, pitching it as a better-for-you alternative to traditional fast food.
In 2011, the concept won an investment from Brentwood Associates, which helped Veggie Grill triple in size and in sales.
The fast-casual chain grew at its height to 35 units, all company owned. But, while Veggie Grill once stood alone among plant-based restaurant chains, now there is a lot more competition, from celebrity entrepreneur Pinky Cole’s Slutty Vegan and Native Foods, to Hip City Veg, PLNT Burger and Plant Power Fast Food. Diners can also now find plenty of plant-based options at all kinds of restaurants.
“The plant-based sector got, I would say, a little over-hyped a couple of years ago,” Pillan said. “Now we’re getting normalized. But if you compare where plant-based is now with where it was when we started Veggie Grill, it’s night and day.”
With that hype, came a lot more investment in plant-based products and restaurant brands, he said, as “everybody thought they had to get on the bandwagon as quickly as possible.”
Even Veggie Grill wasn’t immune to the hype.
In 2021, the chain launched sister brand Stand-Up Burgers, offering a streamlined menu focusing more specifically on burgers, fries and shakes. The four locations of Stand-Up Burgers, however—including two in California and two in Chicago—were among the 12 to shutter.
“We thought we could be this multi-brand plant-based platform company,” Pillan said. “And we thought [Stand-Up Burgers] would be a second growth vehicle that would allow us to accelerate even faster. That was a little too ambitious.”
In addition, Veggie Grill had also launched two virtual brands with the idea they could be offered for delivery out of the primary brand’s kitchens. Más Veggies Taqueria, featuring plant-based tacos, is still in play with a menu available for delivery or pickup at Veggie Grill locations.
“Mas Veggies is a concept that has gotten good traction,” Pillan said. But he added, “We have taken a step back in terms of marketing it. Mas Veggie is not marketed in restaurants anymore.”
A second virtual brand called Vegan Bowls for All, however, will not be continued, he said.
Now Veggie Grill will focus on menu innovation for the primary brand, Pillan said.
The chain now uses Beyond meat for burgers and other dishes, as well as Tindle Chick’n and, most recently, a realistic Yo Egg, which serves as a sunnyside-up topping for a Huevos Rancheros Bowl, and a poached egg-like topper for avocado toast.
Veggie Grill also is about to launch a new Steak Fajita Quesadilla, made with Beyond Steak, and is upgrading the Sonoran Bowl, a longtime fan favorite. The chain is also exploring a new Koji turkey by Prime Roots made with mycelium, Pillan said.
Veggie Grill is not alone in closing restaurants. Other casualties in the plant-based restaurant space include Honeybee Burger in Los Angeles. The plant-based concept Wild Thing in Portland, Ore., closed in July after two years. So did VegeNation in Las Vegas after eight years there.
And yet they keep coming. In Los Angeles this month, the new Hey Sunshine Kitchen opened with plant-based bowls, sandwiches and tacos.
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