Operations

Tender Greens, Tocaya have 'no plans to close locations'

Photo: Tender Greens

July 29, 2024

Although Los Angeles-based Tender Greens and Venice, California-based Tocaya Modern Mexican filed for Chapter 11 last week, neither brand is closing locations, said Harald Herrmann, CEO of Table Restaurant Brands, the parent company of both fast casual chains.

"Our plan is to emerge from the restructuring process stronger and better positioned to prosper in the future," Herrmann said in an email interview with FastCasual. "We have no plans to close any of our locations at this time and will continue to operate 'business as usual' throughout the restructuring process."

Tender Greens has 24 restaurants, and Tocaya, a Mexican chain, has 15 locations.

In the bankruptcy filing, Herrman said the sales and profits of both brands, which were combined in 2021, never recovered from the Covid-19 pandemic. Tender Greens' average unit volume dropped from $3.4 million in 2019 to $2.9 million in 2023. Tocaya's fell from $3.4 million to $2.1 million.

The company has between $10 million and $50 million in liabilities, according to its bankruptcy filing and the SFGate, mainly from a decrease in customer footfall when COVID forced office workers to stay home. Also, between 30% and 40% of orders are now made through third-party carryout and delivery apps, with commissions negatively impacting sales. Herrman also said California's $20 per hour fast food minimum wage, inflation and the state's empty office districts were contributing factors, according to the San Franciso Examiner.

Although Herrmann didn't say he was seeking a buyer, he did not rule out the possibility.

"We are evaluating all of our options as we proceed through the restructuring process," he told FastCasual.

Herrmann founded The Yard House, served as president of Darden's $1.5 billion Specialty Restaurant Group and was the former CEO of Mendocino Farms, which has nearly 60 locations.