Thompson has managed the company for the past two years.
Thompson Hospitality, which invested $11 million in Matchbox Food Group two years ago, agreed to buy the brand out of bankruptcy for $14 million.
The 12-unit Matchbox, with locations in Washington, D.C., Virginia, Texas, Maryland, and Florida, declared bankruptcy in Maryland on Monday. According to the filing, the brand has between $0 and $50,000 in assets and between $50 million and $100 million in debt. The asset purchase agreement with Matchbox is contingent on the court’s approval.
The Virginia-based Thompson Hospitality, which has overseen operations at Matchbox since 2018, also runs American Tap Room, Austin Grill, Big Buns Damn Good Burgers, the Delegate, Hen Quarter, The Rub Chicken & Beer, and Yot Bar & Kitchen.
“For the last two years, Thompson Hospitality has joined forces with Matchbox to manage our restaurants and develop new ones,” said board member Edwin Sheridan IV in a statement. “They are now proposing to take a larger role, proposing a purchase of the chain, subject to court approval. The Matchbox brand now has a clear path forward that enables us to be flexible in any environment. We are confident that we will emerge stronger.”
The bankruptcy comes after a string of troubling years for Matchbox. Five years ago, the chain was reportedly preparing for expansion, but financial issues arose when new restaurants went over budget and opened late, according to the Washingtonian. That led to a legal battle brought on by founders Ty and Mark Neal, who claimed Ron Paul, CEO of investor EagleBank, conspired to oust them from the company. Then in 2017, Matchbox sold its five-unit Ted’s Bulletin to Steve Salis, co-founder of &pizza.
Matchbox first opened in July 2003, and soon became recognized as Washington D.C.’s “best New Restaurant” by the Restaurant Association of Metropolitan Washington.
Sheridan said the brand is working with landlords to keep restaurants open. He added that if negotiations fail, then locations will be forced to close.
“Restructuring will allow us to right-size our balance sheet and position the business for growth going forward,” Sheridan said. “The impact of COVID-19 pandemic on the restaurant industry has been swift and damaging. The Chapter 11 process will enable us to emerge as a stronger company, and to continue to serve as good partners with our team members, vendors, landlords and our loyal guests.”
Matchbox is the latest restaurant to be bought out of bankruptcy.
Portland-based investment firm Sortis Holdings announced last week that it acquired Bamboo Sushi parent Sustainable Restaurant Group. FoodFirst Global, owner of Brio Tuscan Grille and Bravo Cucina Italiana, agreed to a $30 million deal with Earl Enterprises, and Aurify Brands said it plans to reopen more than 40 Le Pain Quotidien units after agreeing to purchase the brand out of bankruptcy for $3 million.
Fortress Investment Group purchased Logan’s Roadhouse parent Craftworks Holdings for $93 million and bought Southern fast-food chain Krystal for nearly $50 million.