It’s difficult to remember a year in which more restaurant franchises struggled financially than in 2024. Another Chicago-based corporation with ten Illinois sites has unexpectedly filed for bankruptcy.
Nation’s Restaurant News has reported that Roti Modern Mediterranean has filed for Chapter 11 bankruptcy. its story claims that Roti is based in Chicago, and its official website lists ten distinct Illinois locations.
Chicago – Adams
Chicago – Dearborn
Chicago – Lake and Michigan
Chicago – Lincoln Park
Chicago – West Loop, Hyde Park, Mellody Farms
Northbrook – Skokie and Dundee Oak Brook Schaumburg
The good news, at least in the near term, is that the press release states that they intend to keep all of their stores, including those in Illinois, open while they seek financial restructuring and support.
Roti was founded in Chicago in 2006 and closed some sites following the 2020 closures, but the goal is that they may find a new path forward that will allow them to maintain their operations and build their brand. The restaurant chain has outlets in Maryland, Minnesota, and Washington, D.C.
The Sudden Announcement
According to court filings, the food chain filed for bankruptcy under Chapter 11 but has yet to make an official public statement. This strategy often enables businesses to restructure their debts while continuing to function. However, in this situation, all 10 Illinois stores have closed indefinitely, leaving the brand’s and employees’ futures uncertain.
The bankruptcy case reportedly contains millions of dollars in outstanding debt, such as unpaid obligations to suppliers, renters, and other business partners. Hundreds of employees have lost their jobs as a result of the unexpected shutdown, leaving them seeking answers. Customers were also taken off guard, with many arriving at their favorite locations only to discover the doors shut and a sign proclaiming the closure.
Financial Problems Behind the Scenes
Industry sources thought that the food chain has been struggling for some time, despite its outward prosperity. Rising prices, particularly for food and labor, along with lower customer spending, may have contributed to the financial instability. While the COVID-19 pandemic had a significant impact on the restaurant business, several companies have recovered in recent years, making the bankruptcy declaration all the more startling.
Furthermore, the chain has rapidly expanded during the previous decade, building many new stores in Illinois. While growth can be a sign of success, rapid expansion can sometimes cause cash flow issues, particularly if new locations do not perform as projected. There are also claims that the chain experienced severe competition from newer, trendier restaurants, which may have reduced its consumer base.
Impact on Employees and Customers
Employees of the chain have suffered the most direct effects of the bankruptcy filing. Hundreds of workers were unexpectedly laid off, many without severance pay or any instructions on their next steps. Local employment sites have already witnessed an increase in applications from former employees looking for new positions, and several have complained on social media about a lack of communication from corporate management.
Customers have also voiced disappointment at losing a favorite dining option. Many long-time customers have resorted to social media to express their dissatisfaction, claiming that they had no idea the chain was in financial problems. Some had even purchased gift cards or memberships, unsure whether they would ever be able to use them.