One Table Restaurant Brands, parent of fast-casual chains Tender Greens and Tocaya, filed for Chapter 11 last week as the business faced multiple challenges.

Tender Greens, which boasts responsibly-sourced food, operates 24 restaurants, while Tocaya, a modern Mexican chain, has 15 locations across California and Arizona.

In the bankruptcy filing, One Table CEO Harald Herrmann said the sales and profits of both brands never recovered from the Covid-19 pandemic. Tender Greens’ average unit volume (AUV) dropped from $3.4 million in 2019 to $2.9 million in 2023, while Tocaya’s AUV fell from $3.4 million to $2.1 million.

When the two businesses were combined in 2021, they both were carrying debt used to finance expansion between 2017 and 2019, Herrmann added.

Another challenge was the decrease in customer footfall as the brands were reliant on office workers. In addition, around 30-40 per cent of orders are now made through third-party carryout and delivery apps, with commissions negatively impacting sales.

“A commission rate of between 15-18 per cent depending upon the provider, coupled with related packaging costs of 4 per cent, make these sales less profitable,” Herrmann elaborated.

The CEO also cited pressures from rising inflation and high salary in order to compete for staff in California.

Chapter 11 bankruptcy protection allows a company to reorganize while devising a plan to pay off its debts. One Table has not confirmed any store closures as it is working toward a sale of the business.

Tender Greens and Tocaya join a series of restaurant chains that have declared bankruptcy this year, namely Red Lobster, Rubio’s Coastal Grill, and Tijuana Flats among others.