Note: The Fondren location is open and going strong.
Eat Here, the parent company of Babalu, filed bankruptcy Tuesday in U.S. District Court in Georgia. Simply put, the company expanded too quickly, took on too much debt, and went broke when several restaurants lost money.
Local restaurateurs Bill Latham and David Roberts are members of the Board of Managers. Eat Here operated Babalu restaurants in Atlanta (2), Knoxville, Memphis (2), the Fondren, Chapel Hill, Lexington, and Birmingham. The restaurant serves upscale "Latin-inspired" cuisine. Mr. Latham and Mr. Roberts opened the first location in the Fondren in 2010.
The duo formed Eat Here in 2012. Eat Here also owned several Five Guys restaurants but sold them in 2015. The company also owned Table 100 but sold that as well to the original owners, Mr. Latham and Mr. Robert. The company obtained a $15 million line of credit in 2017 from Origin Bank. Eat Here also issued unsecured notes to 35 investors for $3 million in 2015. The notes are due in May 2020 and have a balance of $1.6 million.
Babalu grew too big, too fast, as the "rapid growth strained Eat Here's resources." Several restaurants started strong but quickly faded soon after opening. Eat Here signed leases for additional restaurants in Nashville, Charlotte, and Columbus but cancelled the openings. Thus the company was stuck with expensive lease payments with no offsetting revenue.
The company has over 500 creditors. Eat Here employes 567 people. Eat Here asked the Court's permission to keep paying the employees through bankruptcy. Eat Here owes Origin Bank $5.9 million. The Court approved several motions filed by Eat Here, including one seeking permission to obtain post-petition financing. The restaurants will keep operating through bankruptcy.
35 comments:
When you swing for the fences, you better have a ass load of cash in your pants.
I wonder if all the Babalu locations were as noisy as the one in Fondren.
That sucks. I figured it would flourish in other markets. It was pretty cool that a local joint was able to franchise out and expand.
The few times I ate there I left hungry.
Owning and operating restaurants is a tough time consuming business. A restaurant is only as good and profitable as it is today. And accumulating debt is a show-stopper.
They have a really cool sign out front in The Fondren.
Well it’s finally starting to happen....not everyone can profitably own and operate their own restaurant.
I’m amazed there haven’t been more filings like this.
Hard working people....good food....hope it pans out.
All what you noted Kingfish plus they drank too much of their own kool-aid and believed too much of their own hype.
^^^4:28 not a meat n tater place
latham and roberts were for years the best resturantures there were around here. they could do no wrong . they started amerigo in 1991 . this is the first flop by them. pretty good though considering 40 years in the business. most of these goofballs today dont last 40 days much less 40 years.
Attn 5:59 Get an education and learn to write (not right) before you display your ignorance!
We really enjoy going to Babalu and in addition to the one in Jackson the two in Memphis always seem to be doing well. You can get plenty of yummy food 4:28 but realize your meal will be more than $10 a person because for example wife and I may order three or four things and split it. Bankruptcy is the perfect option to get back to working and making them money they can shed the bad locations, will keep the profitable ones and take their rightful place as owner of successful restaurants. Don’t know them but respect their product. Many of their entrees has a gourmet Jazz to it at $15 - $20/head.
Getting a lecture on the theory of tapas from some over educated millennial is fun.
Wild Bill’s Karma Grill
I refuse to go to Babalu during lunch. Why? Not because it’s crowded (I can typically get a seat in no time) but because they have THE SLOWEST service of any restaurant in Jackson. Most folks that work don’t have time for a leisurely lunch on a weekday.
"Upscale" and tacos is a silly combination. There are better tacos nearby for more reasonable prices. This is akin to an "upscale" fish house or chitlins joint. And that whole pretentious "make a show at the table of making guacamole" is even sillier.
I suppose an "upscale" environment appeals to people who think McMansions with granite countertops and $60,000 SUVs and pickups in the garage are reasonable.
Everybody loves to pile on a loser. The Babalu in Jackson is not the problem. Its very successful. Taking on debt and assuming you can open 10 more was the problem.
But they have small plates........
5:13 - Where can I get a nice, $60,000 pickup?
Don't Forget - The infamous and soon to be deposed Supervisor David Bishop famously opined in open session that 'Bankruptcy is a good business tool'. Not a 'fallback' business tool or 'safety net' business tool or a 'last ditch desperation' business tool BUT a GOOD business tool.
Another indication that we are actually just a Chick-fil-a/Wal-Mart town....
Looking forward to the new Costco....
As has already been pointed out, Bill Latham and Al Roberts (a/k/a David) have been highly successful restaurateurs for over 40 years, starting with Scrooge's, then Sundancer, then Amerigo, Char, Babalu, Table 100, 5 Guys, and I'm probabaly missing some. Most of these they sold, I'm sure very profitably. To have one failure in this business in over 40 years is nothing. Nothing. Hats off to this two local, highly successful entrepreneurs.
One failure is nothing unless you happen to be an investor.
5:13 - make a show? It's called making it fresh, as opposed to having vats of pre-squished stuff sitting around until served. Of all the things nitpick worthy, this one is just silly. Go look at what passes for guac at places that don't do table-side.
9:09 - If you are an investor in the food industry, you most assuredly know the risks. If you are an investor in the food industry who doesn't know the risks, I'd like to talk to you about giving me money for a great idea that I have...
Didn't our friends at Pinnacle Trust pitch investing in Eat Here Brands??
Bill has done extremely well over the years. Plus he's a fondren jacksonian.
9:57 - Pinnacle Trust did pitch Eat Here
I believe eat here was actually doing great for years right? they tried to grow for the hom erun and it blew up? someone got greedy
My guess is this is a way to terminate the leases on the closed locations. They will then be able to service the existing debt with revenue from the remaining successful locations.
Everyone should go to "The Fondren" Babalu this weekend and have a delicious Babarita (pomegranate margarita)! Cheers!
JACKSON, Miss
"Our six Babalu locations will not be affected by the filing," said Babalu marketing director Stacey McMinn. "Chapter 11 allows us to remain in business as usual while we restructure, and most importantly, it protects our team members."
Advertisement
Babalu began in Jackson in 2010 and expanded with restaurants in Chapel Hill, North Carolina; Lexington, Kentucky; Birmingham, Alabama; Knoxville; Atlanta and two in Memphis. The Chapel Hill and Lexington locations closed recently with negative cash flow, McMinn said in a statement.
Way overpriced for my taste....I love Mexican food...it's really easy and cheap to prepare....not surprised though. Cash Flow is king in the restaurant business.
Taco Bell will be serving Margaritas in about 100 test markets later this year
and that will be a great lunch.
I'm also hearing a new Chic-Filet will be next to the new Costco!
8:04 - I assume you mean $60,000 is cheap for a pickup? Good Lord. A decent pickup ought to cost no more than $20,000. This would be possible without government-mandated bs. Just a plain work truck, not a status symbol.
9:25 - Guacamole, like soup and chili, tastes better when the flavors have had some time to meld. We make it at home and know. The show at the table is silly, pretentious bs. I don't need a silly waiter wasting my time mixing it in front of me and acting like they just performed a miracle.
Green Ghost is much better, as is Fuzzy's in Clinton. But they don't have an "upscale" environment, which is silly for Mexican street food.
Post a Comment