Skip to content

This Beloved Southern Chain Just Filed for Bankruptcy

The cafeteria-style restaurant is facing significant financial hurdles.

Last week Luby's Inc., the company behind Luby's Cafeteria and Fuddruckers chains, announced they would be liquidating the business. Now, another beloved Southern cafeteria-style brand is facing financial hurdles that may be detrimental to their business.

Make sure you don't miss 15 Classic American Desserts That Deserve a Comeback.

K&W Cafeteria, a North Carolina–based chain with locations in South Carolina, Virginia, and West Virginia, has filed for chapter 11 bankruptcy earlier this month. The company operated 28 restaurants across the four states in the beginning of 2020, but has since shuttered nine of those locations permanently.

According to QSR Magazine, the company is either going to sell off their remaining locations, individually or as a group, or opt for a more traditional restructuring which would allow the sale to take place at a later time.

The family-owned business has been around for over 80 years, serving cafeteria-style food for dine-in customers, as well as takeout and catering. President Dax Allred noted the company had modernized their restaurants and started offering online ordering and delivery in recent years. However, during the height of the pandemic, they had seen an 80% decline in sales.

While the bankruptcy proceedings are underway the remaining locations will stay open for business. According to Allred, the company is looking to come out of the bankruptcy as a more stable business. "We are hopeful this restructuring will allow our cafeterias to weather the storm and continue serving guests for years to come," he said in a statement.

Buffet-style businesses have been particularly susceptible to the negative impacts of the pandemic on restaurants. Earlier this year, Garden Fresh Restaurants, which operated Souplantation and Sweet Tomatoes chains, had permanently closed down all 97 of their locations.

Allred said the K&W Cafeterias were additionally affected by their catering to an older demographic. "While the coronavirus hasn't left any segment untouched, we're particularly impacted, as our clientele is trending towards the elderly," he told The News & Observer in late August.

Don't forget to sign up for our newsletter to get the latest restaurant news delivered straight to your inbox.

Mura Dominko
Mura is ETNT's Executive Editor, leading the coverage of America's favorite restaurant chains, grocery stores, and viral food moments. Read more about Mura
Filed Under