Oprah Winfrey made a 'significant' investment in True Food Kitchen in 2018. The resturant chain is now filing for bankruptcy

Oprah Winfrey-backed True Food Kitchen has filed for Chapter 11 bankruptcy protection amid management issues and challenges in expanding its operations. The resturant chain, which filed for bankruptcy on Sunday, has closed 12 outlets while 34 remain operational across 14 states. As per Fox Business, outlets in Century City, El Segundo, and San Diego UTC in California; as well as other cities such as Miami, Chicago, New Orleans, and Columbus, Ohio have been shut down.

Oprah said to have made a significant investment in True Food Kitchen in 2018 but the exact amount was never disclosed. However now she is a minority investor without a representative on the company's board and is not involved in daily management activities.

What went wrong

True Food Kitchen, founded in 2008, built its brand on nutritious meals derived from thoughtfully sourced ingredients. However, constant change in management "resulted in frequent changes to expansion strategy, brand direction, and menu offerings". Under various leadership teams, the chain invested in new products and concepts that deviated from its mission centered around health-focused dining. The company also experimented with ghost kitchens and a separate delivery-only kitchen amidst declines in in-person dining due to the pandemic. However, these initiatives hampered staffing and service quality. Some resturants could not attract enough customers while others' profit declined, as per a Fox Business report.


At the time of filing, the company had approximately $42.1 million in funded debt obligations with approximately $1.6 million in unrestricted cash reported, sufficient only to sustain operations and cover bankruptcy expenses for about two weeks without further financing.

CEO Jeff Chandler, who took charge in July, called the bankruptcy process "the best path forward" for the company. He emphasized the need to simplify the business and focus on "delivering craveable, health-forward food and genuine hospitality." In a declaration, Chandler expressed confidence that the step taken would lead to a stronger True Food Kitchen in the future.

Before filing for bankruptcy, the company tried to mitigate its challengesby laying off corporate staff, renegotiating contracts, and seeking changes to restaurant leases. While the exact number of employees affected by the closures has not been disclosed, Chandler acknowledged the impact of these decisions on team members and thanked them for their contributions.

True Food Kitchen secured a commitment for around $20 million in financing from HumanCo TFK IV, which is subject to court approval. This financing aims to help maintain operations during the bankruptcy and sale processes. The chain has also requested permission from the court to continue paying employee wages and benefits, uphold customer programs, and collaborate with vendors during this time.

The company is now actively seeking a long-term partner to aid in its recovery and future development.