Bad news for lovers of Italian dining: Bucca di Beppo filed for bankruptcy protection under Chapter 11 of the U.S Bankruptcy Code.
Once ranked the 3rd best Italian restaurant in the U.S., Buca di Beppo is famous for its large servings, free delicious garlic bread and iconic decor, including the Pope and Capri rooms.
The news comes as an expected but disarming development as the restaurant shuttered 18 locations last month. Pennsylvania is the hardest-hit state, where three locations are closing. In a statement, the company says the closed locations never fully recovered from the pandemic slump.
Buca’s di Beppo’s Bankruptcy Plan
The restaurant is restructuring its organization across 44 core locations. It will also be opening one new location, according to Rich Saultz, the company’s President.
“This is a strategic step towards a strong future for Buca di Beppo. While the restaurant industry has faced significant challenges, this move is the best next step for our brand. By restructuring with the continued support of our lenders, we are paving the way toward a reinvigorated future.”
Rich Saultz, President of Buca di Beppo
Financial Troubles
According to court filings, the company owes nearly $50 million to 30 creditors. The top 30 unsecured creditors include companies like Sysco (owed over $6.8 million), Edward Don & Company, and various landlords.
The rising costs related to food, labour, and general operations also played a part in the company’s struggles. Some locations were understaffed, while others saw empty dining rooms as the customer base dropped off.
Unredeemed gift cards to make up about $1.36 million of Buca di Beppo’s debt. The company is determined to ensure that all gift cards and services remain redeemable.
Buca di Beppo’s Turnaround Hopes
Founded in Minneapolis in 1993, Buca has been a staple part of American Italian dining, providing a relaxing and festive ambiance.
Due to its iconic rooms and kitschy decor, various franchises like The Real Housewives have used the restaurant chain as a filming location.
The Orlando-based company was bought in 2008 by Planet Hollywood — and it seems they intend to fight for it.
Filing for Chapter 11 allows the company to continue running under the same management, under the condition that they develop a plan to pay back creditors over time. Creditors and bankruptcy courts must approve the plan before implementation.
William Snyder, named the Chief Restructuring Officer of Buca C, LLC stated: “We believe this path will best allow us to continue to serve Buca’s patrons and communities for many years to come. We are open for business in 44 locations, and we expect day-to-day operations to continue uninterrupted. We anticipate moving through this process as quickly and efficiently as possible to emerge as a stronger organization built for the future.”
Buca Is the Latest Restaurant Chain to File for Bankruptcy
Buca di Beppo joins Red Lobster, Sticky’s Finger Joint, Rubio’s Grill, and Tijuana Flats in filing for Chapter 11.
The growing trend is considered a harbinger of a declining economy. Consumers are no longer eating out at restaurants as often as they used to. Even big players like McDonalds and Starbucks are reporting declining sales and profits.
Related: McDonald’s Debuts $5 Meal Deal To Reattract Declining Consumer Base
One thing is clear: Many businesses can no longer afford to continue running as they did pre-pandemic.
