The company closed 71 domestic locations in March, and expects to shut down more.
FoodFirst Global Restaurants, parent of BRAVO Cucina Italiana and BRIO Tuscan Grille, filed for bankruptcy April 10 due to the negative effects of the COVID-19 pandemic.
The announcement comes after the company closed 71 of its 92 U.S. locations in March, and furloughed 6,000 employees, with open stores using a limited carryout and delivery model. FoodFirst is operating with 120 hourly and salaried employees.
The company has assets between $10 million and $50 million and estimated liabilities between $10 million and $50 million.
“The pandemic is creating enormous disruption throughout the economy, and the restaurant industry as a whole is especially affected,” the company said in court documents. “FoodFirst’s difficult position prior to the Pandemic makes its current situation even more precarious. In order to save jobs and the viable Restaurants it will be necessary to pursue a company sale and an accompanying Management Services agreement.”
BRAVO first opened in 1992 while BRIO was founded five years later. By 2006, the two restaurants had expanded to 50 total locations. From 2006 to 2010, the restaurants underwent aggressive expansion and reached 85 units. The company raised $140 million in a public offering in 2010 to cover debt and drive growth. By 2013, there were 107 restaurants.
However, growth and traffic declined as consumer preference shifted to quick-serve and fast-casual. Leadership at the time tried different ways to attract customers, but nothing worked. Five underperforming restaurants closed in 2017 as a result.
FoodFirst, formed in 2018, spent $100 million to purchase and take Brio Tuscan Grille and BRAVO Fresh Italian private, which were later renamed to Brio Italian Mediterranean and BRAVO Fresh Italian, respectively. At the time, the two brands operated a combined 110 locations in 32 states and had sales in excess of $400 million in 2017 with around 10,000 employees.
As part of the changes, headquarters moved from Columbus, Ohio, to Orlando, Florida, and new Italian Mediterranean menus were implemented. The changes did not have the intended effect as sales dropped to $307 million in 2019. According to the filing customer satisfaction increased, but labor costs, employee turnover, and a large number of underperforming restaurants sank sales volume and profitability.
CEO Steve Layt, a former Pizza Hut executive, took over in late January to right the ship. At the time, 10 locations had closed in early January and more were under review. Layt’s priorities were to improve efficiency and cut costs in terms of labor, food waste, and marketing. That turnaround process was interrupted by the COVID-19 pandemic, forcing the bankruptcy.
“The improvement process was radically altered due to the current international health crisis, creating massive restaurant closings and employee losses throughout the country via state ordered shelter-in-place requirements, which exacerbates the need to reduce the Restaurants’ footprint in order to maintain the strongest and most viable locations,” FoodFirst said in the filing.
The company will continue to close more units as it expects to reject a large number of leases soon. The lawsuit said there are more than 70 stores with leases expiring between 2021 and 2028 and about 20 units with expiring leases in 2020.