Oprah-backed True Food Kitchen files for bankruptcy, blaming management turnover and strategy shifts

• Health-focused chain True Food Kitchen has filed for Chapter 11 bankruptcy protection.
• The company, which cited $42 million in debt in court papers, closed 12 restaurant outposts. 34 remain open.
• Media mogul Oprah Winfrey has been an investor in the company since 2018.

Health-focused restaurant chain True Food Kitchen, which has counted Oprah Winfrey and former Starbucks CEO Howard Schultz among its backers, has filed for bankruptcy.

The Phoenix, Arizona-founded chain filed for Chapter 11 bankruptcy protection in a Texas court on Sunday and is pursuing a court-supervised sale of the business as part of its restructuring proceedings.

True Food Kitchen also closed 12 of its restaurants on the day it filed, cutting its footprint to 34 locations across 14 states. Those eateries remain open and are serving customers as usual, the company said.

The company's Chapter 11 court filings say it is about $42 million in debt and cites management turnover and the effects of the COVID-19 pandemic as reasons for its bankruptcy filing.

True Food Kitchen's "growth was accompanied by a number of operational challenges," a court filing in the bankruptcy case said.

"The Company experienced significant management turnover, which resulted in frequent changes to expansion strategy, brand direction, and menu offerings," said the filing.

It added, "Under successive leadership teams, the Company invested capital outside its core market areas and in new product lines and restaurant concepts that were ultimately unsuccessful and outside of the Company's core mission and menu."

The filing said that while many True Food Kitchen outposts are profitable, several have struggled with low foot and vehicle traffic, and others have been affected by "changing market forces and demographics," leading to revenue losses.

True Food Kitchen was founded in 2008 by wellness author Andrew Weil and restaurateur Sam Fox, who wanted to serve both delicious and healthy food for an anti-inflammatory diet.

In 2017, the company spun off from Fox's restaurant group as FRC Balance, LLC. A year later, Winfrey made an undisclosed equity investment in the company and also joined its board of directors.

"When I first dined at True Food Kitchen, I was so impressed with the team's passion for healthy eating and, of course, the delicious food, that I knew I wanted to be part of the company's future," the media mogul said at the time.

A spokesperson for True Food Kitchen told Business Insider on Monday that Winfrey is no longer on the board, but remains a "minority investor." Representatives for Winfrey did not immediately respond to a request for comment on the Chapter 11 filing.

Meanwhile, in a statement Monday, True Food Kitchen CEO Jeff Chandler called the company's bankruptcy filing the "best path forward to simplify the business and focus on what we do best: delivering craveable, health-forward food and genuine hospitality."

"We are confident this step will help us build a stronger True Food Kitchen for the future," he said.