This year was The catering industry is teeming with bankruptcieswith Red Lobster, Buca di Beppo and Tijuana Flats among the major chains affected by this trend. And late last week, a struggling Midwestern Mediterranean restaurant chain became the latest to file for bankruptcy in 2024.
Roti – a Chicago-based fast-casual brand that offers a variety of bowls, salads and pita wraps –announced on August 23 that it had filed for Chapter 11 bankruptcy. In a statement, CEO Justin Seamonds explained the decision by citing a number of financial problems.
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“Our vision of enabling happier, healthier and tastier lives is becoming a reality by providing our guests with exceptional dining experiences – even in the face of current headwinds. After careful consideration, filing for bankruptcy protection was the best way to address our challenges – including financial performance, higher costs, mixed site performance and challenging market conditions – while remaining open and focused on providing Food For A Full Life to each and every guest,” he said, referring to Roti’s slogan “Food For A Full Life.”
Although Technomic data shows Roti was one of the fastest-growing restaurant chains before the COVID-19 pandemic, its revenue and size have been declining in recent years. The website currently lists 19 restaurants, about half the number before the pandemic. Restaurant Business Magazine reportedLast year alone, Roti closed four of its restaurants and also saw a systemwide sales decline of a remarkable 12%.
The chain said it plans to use the Chapter 11 bankruptcy filing to seek new investors or a buyer and reorganize its finances while working to keep its remaining stores open. Roti also plans to continue offering its full menu, loyalty programs and catering at its restaurants in Chicago, Minneapolis and Washington, DC.
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“Given the turbulence in the restaurant industry, we are proud of our transparency with our team and the goodwill we have earned from our suppliers and landlords over the difficult four years,” Said Seamonds. “Bankruptcy is a process designed to give businesses like us the tools to stay open, keep employing our exceptional team members, and explore the future prospects for Roti. We expect our loyal, flavor-hungry guests to continue to enjoy us as we tackle this necessary next step in our journey.”
Consumers shouldn’t be too surprised if more restaurant chains file for bankruptcy before the end of the year. BurgerFi recently hired a turnaround manager, another sign that the struggling gourmet burger chain may be facing bankruptcy. Citing anonymous sources, Bloomberg also reported last month that Mod Pizza was preparing a possible bankruptcy filing. However, the sources said the company has not made a final decision and its plans could change.
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