Owner says there was no way the restaurants’ longtime self-serve model could survive in the era of COVID-19
Souplantation, the popular buffet-style dining brand founded in San Diego 42 years ago, is closing all of its restaurants permanently, a casualty of the coronavirus pandemic that is likely to be the death knell for all self-serve eateries.
The permanent shuttering of the 97 restaurants, including 44 in California, was announced Thursday following weeks of efforts to salvage San Diego-based Garden Fresh Restaurants, the parent company of Souplantation and Sweet Tomatoes, which operates outside of Southern California. The closing will mean lost jobs for 4,400 employees.
“The FDA had previously put out recommendations that included discontinuing self-serve stations, like self-serve beverages in fast food, but they specifically talked about salad bars and buffets,” said John Haywood, CEO of Garden Fresh. “The regulations are understandable, but unfortunately, it makes it very difficult to reopen. And I’m not sure the health departments are ever going to allow it.
“We could’ve overcome any other obstacle, and we’ve worked for eight weeks to overcome these intermittent financial challenges but it doesn’t work if we are not allowed to continue our model.”
The closure comes as restaurants in California and across the country struggle to remain financially solvent amid a pandemic shutdown that has forced eateries to close dining rooms while allowing only curbside pickup and delivery. That sort of temporary pivot didn’t work for Souplantation, known for its all-you-can eat signature salad bar, house-made soups, focaccia pizza, baked goods, baked potato bar, pastas, soft-serve ice cream and beverage bar.
The Garden Fresh restaurants’ swift drop in revenue, as fears about the coronavirus grew in February and March, was even more precipitous than at other eateries, given the buffet concept, said Robert Allbritton, chairman of Washington, D.C.-based Perpetual Capital Partners, a private investment firm that purchased the restaurant company following a bankruptcy filing in 2016.
“We spent two years researching and trying to improve things and actually got the business turned around,” Allbritton said. “We were growing the number of guests and were in the process of renovating the restaurants with new fixtures, carpeting, signage as late as January. We felt great about it. But I’ve got to tell you, when the virus hit, we went from 100 percent to 70 to 30 to 10 percent that fast, before the restaurants closed down and the company ran out of money in one week.”
Allbritton said that he wrote a check five weeks ago for $2.5 million to help cover the final payroll.
“We looked at the (federal) Paycheck Protection Program, but even with that we didn’t see how we could reopen the restaurants. We can’t take that money, it’s just disingenuous.”
With multiple restaurants now shuttered and rent still due at leased locations, a bankruptcy filing is very possible, Allbritton said. Haywood added that the company has “engaged bankruptcy counsel and they are evaluating options for the company.”
The decision to finally close the Souplantation and Sweet Tomatoes eateries was especially hard, said Haywood, given the loyal base of customers and employees. It also is coming not long after plans were launched to expand.
“We’ve had positive guest counts every year,” Haywood said. “Every measurement of operations had been higher. It really is a wonderful company and concept and magic for a lot of kids. It’s their first memory of where they can do their own thing. It’s an emotional connection.”
Started in 1978, Garden Fresh originated as a single, San Diego Souplantation location and, in 1986, expanded to the broader Southern California region, which continues to remain the core of the business. In 1990, the company moved beyond its local roots with a Palm Harbor, Florida, location under a separate brand name, Sweet Tomatoes.
San Diego restaurant consultant John Gordon said that despite Garden Fresh’s efforts at a turnaround for Souplantation, its demise was inevitable.
“Restaurant buffet operations all over the country were in deep sales decline for years prior to the Covid-19 impact in March, and the prolonged period of zero revenue since March and the possibility that US/state/local sanitation standards would prohibit buffet operations likely was responsible for the decision,” said Gordon, principal and restaurant analyst at Pacific Management Consulting Group, based in San Diego. “The restaurant world has already changed dramatically and unfortunately Garden Fresh and Souplantation do not fit into the new reality.”