The UTC restaurant at 4303 La Jolla Village Drive is now permanently closed, ending a nearly nine year run at the University City shopping center. True Food Kitchen confirmed the San Diego UTC restaurant is among 12 locations being eliminated as the company attempts to restructure approximately $42.1 million in funded debt and pursue a court supervised sale.
For San Diego fans of the restaurant, however, there is some good news: True Food Kitchen's original local restaurant at Fashion Valley remains open and operating. The company currently lists its Fashion Valley restaurant at 7007 Friars Road as open, with reservations, online ordering and regular operating hours still available. Fashion Valley itself also continues to list the restaurant as open.
The closure brings an abrupt end to True Food Kitchen's substantial UTC restaurant, which debuted on November 2017 as part of a major wave of new dining concepts arriving during Westfield UTC's redevelopment. At approximately 9,000 square feet, the restaurant opened with a 200 seat dining room, open kitchen and outdoor patio space. The company was seeking approximately 130 employees ahead of its opening.
At the time, UTC represented an expansion for a brand that appeared to be rapidly gaining momentum. True Food Kitchen had already established a San Diego following with its Fashion Valley restaurant, which opened in July 2012 and remains in business today.
Nearly nine years later, the UTC restaurant has become one of the casualties of a much larger financial reckoning for the company. True Food Kitchen filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas on October 4. Court records identify FRC Balance, LLC and eight affiliated debtors doing business as True Food Kitchen and list approximately $42.1 million in funded debt. The bankruptcy petition estimates both assets and liabilities between $10 million and $50 million and identifies between 200 and 999 creditors.
As part of the restructuring, True Food Kitchen closed 12 of what had been approximately 46 restaurants, leaving 34 locations across 14 states operating. The company confirmed the closures include San Diego UTC, Century City and El Segundo in California, as well as restaurants in Miami, Chicago, New Orleans, Bethesda, Edison, Hackensack, Garden City, Columbus and Reston.
The company's financial condition had become particularly strained by the time it sought bankruptcy protection. According to court documents cited by FOX Business, True Food Kitchen entered Chapter 11 with approximately $1.6 million in unrestricted cash, which its financial adviser said would cover operations and bankruptcy expenses for only about two weeks without additional financing and other available cash.
True Food Kitchen has secured a commitment for approximately $20 million in debtor in possession financing from HumanCo TFK IV, subject to court approval. The company says that financing, combined with cash generated through continuing operations, is expected to provide liquidity as it restructures and pursues a sale.
Rather than simply reorganizing and emerging under its existing ownership structure, True Food Kitchen is pursuing a court supervised sale and looking for a long term partner to take the business forward. SOLIC Capital is serving as investment banker as the company markets the business to potential strategic and financial buyers.
The bankruptcy filings also offer an unusually candid explanation for how a restaurant company with prominent celebrity investors and a seemingly well positioned health conscious concept ended up in financial distress. Chief Restructuring Officer Nathan Cook said the company experienced significant management turnover that resulted in repeated changes to its expansion strategy, brand direction and menu offerings. Under successive leadership teams, True Food Kitchen invested in new markets, products and restaurant concepts that ultimately proved unsuccessful and strayed from the company's core mission.
The COVID 19 pandemic created additional problems. As in person dining collapsed, True Food experimented with operating ghost kitchens from existing restaurants and launched a separate delivery only kitchen. According to the restructuring account, those efforts created staffing and service problems and were eventually discontinued.
Some restaurants also struggled to generate sufficient customer traffic, while changing conditions in other markets eroded profitability. Before filing bankruptcy, the company cut corporate staff, renegotiated vendor agreements and sought modifications to restaurant leases.
The troubles are particularly notable considering the financial firepower once assembled behind the company. True Food Kitchen was founded in Phoenix in 2008 by prominent restaurateur Sam Fox and integrative medicine physician Dr. Andrew Weil. Its concept was built around Weil's anti inflammatory food philosophy, with menus emphasizing vegetables, whole grains, sustainably sourced proteins and seasonal ingredients while accommodating vegetarian, vegan and gluten friendly diners.
The brand attracted an unusually high profile group of investors as it expanded. Oprah Winfrey made a significant equity investment in True Food Kitchen in 2018 and joined its board at a time when the company was planning aggressive expansion. Winfrey remains a minority investor but is no longer represented on the board and is not involved in the company's day to day operations, according to True Food Kitchen. The company has also received backing from former Starbucks CEO Howard Schultz, while investors associated with HumanCo have included entertainers Nick Jonas and Priyanka Chopra Jonas.
Despite that backing, the company ultimately accumulated approximately $42.1 million in funded debt and concluded that bankruptcy was necessary to address its restaurant footprint and cost structure.
"This process is the best path forward to simplify the business and focus on what we do best: delivering craveable, health-forward food and genuine hospitality," CEO Jeff Chandler said in announcing the restructuring. "We are confident this step will help us build a stronger True Food Kitchen for the future."
Chandler, who became CEO this summer, also acknowledged the impact of the closures on employees, saying the company was grateful for the contributions of affected workers and would provide information regarding resources and next steps. The company has not publicly disclosed how many employees lost their jobs in the 12 closures.
True Food Kitchen insists the bankruptcy does not mean the entire chain is going out of business. The company says its remaining restaurants continue operating and serving customers while the restructuring proceeds.
In San Diego, that leaves Fashion Valley as the brand's sole remaining location. The Fashion Valley restaurant predates UTC by more than five years, having opened in July 2012. The current restaurant includes a large indoor dining room, patio and private dining space and continues serving lunch, dinner and weekend brunch.
Meanwhile, the former UTC restaurant leaves behind a prominent dining space within one of San Diego's busiest shopping destinations. Westfield's own directory now identifies True Food Kitchen at UTC as closed.
The demise of the UTC location represents a striking reversal from its 2017 debut. When True Food Kitchen arrived at the newly developed section of Westfield UTC, the restaurant was part of an ambitious expansion period for both the shopping center and the brand. The sprawling location featured reclaimed wood flooring, chairs made from recycled materials and planters growing fresh herbs, all designed around the company's wellness driven identity.
Now, after nearly nine years of serving University City, its doors have closed as True Food Kitchen attempts to become a smaller and financially healthier company. Whether that strategy ultimately saves the brand will be determined through the bankruptcy and sale process.
For San Diego diners, the immediate takeaway is simpler: True Food Kitchen at Westfield UTC is permanently closed, but the company's original San Diego restaurant at Fashion Valley remains open for business.
