A longtime staple of all-you-can-eat dining across the country is in a bit of financial hot water. HomeTown Buffet and its affiliated chains have filed for Chapter 11 bankruptcy, citing a lawsuit against the company that was apparently undisclosed when the new owners purchased the businesses last year, according to Reuters. Besides what sounds like a lot of internal corporate drama, this news comes at a time when trends in dining are shifting faster than ever before.
Ovation Brands, which owns five buffet brands — including Old Country Buffet, Ryan's, Fire Mountain and Tahoe Joe's — was acquired by Buffets LLC, an affiliate of Food Management Partners, last fall, as Nation's Restaurant News reported.
Those chains operate 150 restaurants around the country. In the 1990s they were a fixture in suburban areas of the U.S. Buffets were seen as a value proposition: Why pay for one plate of food when, for a few extra dollars, the restaurant will serve up an unlimited amount of food? Many chain restaurants — including Sweet Tomatoes, Ruby Tuesday, Pizza Hut, and Sizzler — still incorporate a buffet line into their menu offerings.
Though steam tables and cold platters are found at Indian restaurants and sushi bars in cities across the country, buffet-style dining is a symbol of America. Buffets are ubiquitous in Las Vegas, America's playground. Last year, first generation Korean writer Cecilia Hae-Jin Lee wrote of her memories of Sizzler, "And... there was the salad bar. Like the steaks, it was also the American dream epitomized, in all its shiny brass-and-glass glory. It was all-you-can-eat — you could never go hungry in America. All the vegetables, fruit, and lettuce you could ever possibly eat were here."
The process of creating your own plate of food in a restaurant, selecting each individual option (regardless of flavor or optimal pairings), and indiscriminately devouring the meal was an experience, but one that appears to be losing ground with the general public.
With a newfound focus on fast casual dining, farm-to-table menus (and those made from sustainable ingredients), food incubators, and a resurgence of dining experiments like automats, the buffet has fallen down among the list of profitable restaurant models. Additionally, widespread attention on the health effects of obesity and overconsumption in general have likely caused diners to reconsider, en masse, the prospect and temptation of the buffet. What was once an incredible value is no longer a good deal if a diner is concerned with limiting caloric intake.
At least 74 restaurants under Ovation Brands closed recently due to apparent underperformance, according to CNBC. Unfortunately, the company decided to not inform its employees of its decision, leaving many out of work without notice. Ovation Brands provided a statement to Eater that said the company filed for bankruptcy as a way to restructure its debts and liabilities, strengthen its operations by closing certain weaker restaurants and recapitalize its business."
The statement continued:
Customers will continue to enjoy the same quality food and service as prior to the proceedings, and vendors will be largely unaffected. As a measure of management's confidence, a multi-million dollar loan is being extended to Buffets, LLC, to assist in the restructuring.
Peter Donbavand, the vice president for business development, said a "precipitous decline in sales at the restaurants" was, in his experience, unusual. The company also said that the firm that sold them the restaurant chains did not reveal a pending lawsuit, which ended with a $11.37 million default judgment on the 2014 case that dealt with a 2010 incident.
This is the third time the chains have filed for bankruptcy since 2008, albeit under a different company name, Buffets Inc. Buffet LLC apparently owes $46.2 million in loans, which are secured by its assets and guaranteed by its new owners, USA Today reported. The company has secured legal and financial support to review these issues.