Boston-based vegetarian fast-food concept, Clover Food Lab, has declared bankruptcy. The 12-unit chain and 2019 Nation’s Restaurant News Breakout Brands honoree, filed for Chapter 11 protection with the Delaware Bankruptcy Court on Friday, Nov. 3, under the company name, Clover Fast Food Inc.
Clover Food Lab started as a food truck in 2008 and evolved into a mission-based local, farm-to-table chain, that many of its fans described as a “life-cycle brand” for those interested in eco-friendly meal options, and not just a typical limited-service restaurant brand. The restaurant is run on a commissary model, in which a 20,000 square foot space in East Cambridge services the restaurants and food trucks. The restaurant is also known for its proprietary point of-sale and kitchen display technology, which supports all aspects of Clover’s business.
According to the bankruptcy filing, Clover was experiencing rapid growth before the pandemic, with AUVs of $1.7 million. Even though the company pivoted during the pandemic, by 2023, restaurant traffic was still lower than pre-pandemic levels, and the company’s long-term goals of expansion throughout the New England area “coincided with the failure of Silicon Valley Bank and the subsequent slowing of growth equity financial markets.” Clover closed a round of funding in May and was supposed to close a second round in August, but this never came to fruition, according to bankruptcy documents.
Clover also stated that it faced financial issues with three of its restaurants’ leases, which faced high rents and lower sales, with little relief. In August, one of these restaurants closed permanently.
“Clover filed the bankruptcy case in order to create the breathing room necessary to restructure its operational and financial affairs, review its lease commitments, and reinstate its pre-pandemic growth trajectory,” supporting bankruptcy documents stated, adding that the company will close under-performing location with high rents, and sell some of its delivery vehicles. “The relief requested in the foregoing first day motions is tailored to ease the debtor’s entry into Chapter 11 and ensure its on-going operations through this process.”