Nation’s Restaurant News:
The fast-casual Daphne’s Greek Cafe chain filed for Chapter 11 bankruptcy protection this week, but the company’s founder pledged Thursday the reorganization would be short.
George Katakalidis, who founded the 69-unit chain in 1991 and is now president and chief executive of parent Fili Enterprises Inc., said the company breached a loan covenant about a year and a half ago and attempted to renegotiate terms. The bank, however, “wouldn’t budge,†he said, and the combination of punitive default rates and slowing sales as a result of the economy completed a “triple whammy†that resulted in the decision to seek bankruptcy protection.
“It has been like trying to sprint uphill with a gale wind in your face,†said Katakalidis, a former professional soccer player. “It hasn’t been a fun year.â€
Though many fast-casual players have benefited from the economic downturn as cash-strapped consumers traded down to their lower-priced concepts, Daphne’s has struggled with slipping sales, Katakalidis said.