Restaurant group that owns ‘Babalu’ files for bankruptcy

Restaurant group that owns ‘Babalu’ files for bankruptcy

MEMPHIS, Tenn. (WMC) - The company behind Babalu restaurants filed for Chapter 11 bankruptcy protection Tuesday.

Babalu is owned by the Eat Here Brands restaurant group, which has opened nine restaurants under that name in the last decade.

In 2017, the group opened four new restaurants in East Memphis, Atlanta, Chapel Hill and Lexington. The Chapel Hill and Lexington restaurants have since closed.

According to the court filing documents, this rapid growth strained Eat Here’s resources and led to increased turnover and inconsistent operations. They saw disappointing results at the new restaurants and declining sales at the more established locations.

The documents show in 2018 the group was also forced to close the Charlotte location due to weak revenue. Ultimately, the strain of rent expense at locations with no operating revenue, the loss of portions of their senior management team, significant debt service obligations, and declining cash flow at existing restaurants caused the group to file for bankruptcy.

Babalu is located in Memphis’ popular Overton Square area. The restaurant remains open and Ned Lidvall, interim CEO of Eat Here Brands, says there are no plans to close it.

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