This Bankrupt Sandwich Chain Is On the Brink of Disappearing
Boston-based fast-casual chain Cosi, best known for soups, sandwiches, and flatbread-style pizzas, is trying to speed up its bankruptcy proceedings because a quicker resolution would allow the company to gain access to federal aid allocated to struggling restaurants. Whether Cosi gains access to these funds would mean the difference between coming out of bankruptcy reorganized, or having to shut down completely.
The struggling chain filed for Chapter 11 bankruptcy protection in February of 2020—a second bankruptcy filing since 2016. At the time, the brand spanned a footprint of 13 company-owned restaurants and 16 franchised locations, as well as three catering kitchens. According to their website, there are currently 27 locations with varying degrees of service—some offer catering only while others are open for on- and off-premise dining. At the height of its growth in 2008, Cosi had more than 150 restaurants.
With a diminishing restaurant footprint, the chain revealed in court documents that it had plans to shift focus to catering services post-bankruptcy. However, if the company isn't granted an opportunity to apply for federal funds soon, it will have to go ahead with liquidation, according to a request for an expedited hearing which the company filed last month.
"The Debtors' only realistic hope of emerging from bankruptcy, and avoiding a conversion and liquidation, hinges on their being able to successfully apply for a grant for the Restaurant Revitalization Fund," Cosi wrote in its filing, as reported by Restaurant Business.
The company plans to seek the maximum grant of $10 million, available for restaurants with multiple locations. The applications for Restaurant Revitalization Funds grants, which are part of President Biden's $1.9 trillion COVID-19 relief plan, are currently being accepted. But industry experts worry that the fund could be depleted of cash way before many of the restaurants even apply, which puts a new weight of urgency on Cosi's bankruptcy case.
For more on bankruptcies, check out Another Popular Regional Burger Chain Just Filed For Bankruptcy, and don't forget to sign up for our newsletter to get the latest restaurant news delivered straight to your inbox.