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Fast casual Mediterranean restaurant chain files for bankruptcy
The fast casual Mediterranean chain Roti has filed for Chapter 11 bankruptcy protection, making it the latest in a line of restaurants to do so this year.
The chain is looking for new investors or purchasers to ensure its locations can stay open, it said in the filing on August 23.
Currently, Roti has 19 locations in Illinois, Maryland, Minnesota, and Washington DC, where it serves Eastern Mediterranean-inspired bowls, salads and pitas.
CEO Justin Seamonds said in the bankruptcy filing that it was the best way for the company to address its challenges, which include higher costs and tough market conditions.
It comes amid widespread restaurant closures and bankruptcies across the US in recent months, as soaring food inflation and elevated running costs continue to hit businesses.
The fast casual Mediterranean chain Roti has filed for Chapter 11 bankruptcy protection
In its filing, Roti estimated that its assets were up to $50,000, and its liabilities were between $1 million and $10 million.
The company said it will 'continue to offer its entire menu, catering, loyalty programs, and distinctive make-line experience across its locations' during the bankruptcy process, Fox Business reported.
Roti said it intends to work with its landlords and suppliers in order to keep operations going at its restaurants.
Seamonds said the Chapter 11 filing 'was the best way to address our challenges – including financial performance, higher costs, mixed location performance and tough market conditions – while staying open.'
The chain said that it had been particularly hard hit by the Covid-19 pandemic, as half of its locations are in downtown business areas, but it had 'made it through' that difficult time.
However now it is seeing a 'current restaurant climate mired in a consumer spending downturn,' the company said.
Several other fast casual restaurants are also struggling.
Increased costs for food and labor are causing local small businesses to close, chains to shutter locations and are even forcing some companies into bankruptcy.
Seafood chain Red Lobster filed for Chapter 11 bankruptcy in May, citing an ill-fated $20 all-you-can-eat shrimp promotion as one of the reasons.
The chain closed more than 100 locations following the announcement, and is set to shut 23 more locations across 15 states by August 31.
Currently, Roti has 19 locations where it serves Eastern Mediterranean-inspired bowls, salads and pitas
The chain is looking for new investors or purchasers to ensure its locations can stay open, it said in the bankruptcy filing
CEO Justin Seamonds said the bankruptcy filing was the best way for the company to address its challenges, which include higher costs and tough market conditions
Mexican chain Rubio's Coastal Grill also entered bankruptcy proceedings, as well as popular Italian restaurant Buca di Beppo, after it abruptly shut 13 underperforming locations across the US earlier this month.
In a statement to DailyMail.com, the company confirmed it had closed locations which were 'unable to recover from the damage caused by the pandemic and other market pressures.'
In June, a Subway franchisee filed for Chapter 11 bankruptcy protection, putting its 48 locations at risk of closure.
BurgerFi also confirmed that it is teetering on the edge of bankruptcy.
BurgerFi, which also owns Anthony's Coal Fired Pizza, said it expects to report a staggering loss of $18.4 million for the second quarter of this year.
The losses leave the company with just $4.4 million available as of August 14.
BurgerFi told the SEC in its most recent filing that it would need further relief from its creditors if it was to remain solvent.
If it does not, and cannot raise enough cash from other lenders or by selling off its assets, it 'may seek protection under applicable bankruptcy laws.'