How Could A Successful Chain Shut Down Like That?
Inside the shocking departure of Chicago's Foxtrot Markets
Hello, and welcome to the CulinaryWoman Newsletter! This issue wraps up my special April offer to anyone who upgrades their subscription or takes out a new paid subscription.You’ll be entered into a drawing to receive an autographed copy of my book, Satisfaction Guaranteed: How Zingerman’s Built A Corner Deli Into A Global Food Community. It can be dedicated to you, a gift recipient or I can send you a signed copy that you can read and give to someone else later on.
Click this button to upgrade, and thank you so much for supporting CulinaryWoman. We don’t take ads or sponsors, so readers keep us in business. Speaking of staying business, Chicago is still reeling from some big restaurant news last week.
Gone In The Blink Of An Eye
For the past decade, Foxtrot Market has been a familiar sight in Chicago. It was founded in 2013 as a beverage delivery app aimed at University of Chicago students. When the creators learned they’d need a physical location to offer beer and wine, Foxtrot opened its first brick and mortar store in 2015.
Long before the pandemic forced grocers to embrace options beyond in-person shopping, Foxtrot promised Chicagoans 30-minute delivery of wine, craft beer, gifts, and pantry items, saying it would be a “better kind of convenience store.”
The stores popped up in key locations like the former Chicago Tribune Building, now luxury condos, and the Willis Tower, which lots of us still call the Sears Tower. Boosted by millions of dollars in investments, Foxtrot ultimately expanded beyond the Windy City to Dallas, Austin and four locations in trendy metropolitan Washington D.C. neighborhoods, giving it 33 stores.
In November, it acquired Dom’s Markets, upscale grocery stores that sold innovative salads, sandwiches, pizza and featured a vegetable butcher who could prep produce for cooking at home. The company changed its name to Outfox Hospitality, and confidently predicted more growth.
Instead, it imploded on Tuesday with zero warning to vendors, customers or employees. You can read all the details in two stories that I wrote for Food & Wine — this one on the stores’ collective shutdowns, and this one on a class action lawsuit that staff members have filed.
The legal protection that wasn’t
What Foxtrot did is not supposed to happen. There is a federal law protecting employees called the Worker Notification and Retraining Notification Act, or WARN (Illinois has its own version of the law).
Companies employing more than 100 people must give at least 60 days’ notice of mass layoffs affecting 50 or more people. Without notice, employers are required to pay employee wages, benefits, vacation pay, and other money owed to them for the next 60 days.
Initially, it was believed that Outfox had about 1,000 employees, which would certainly require it to file a WARN notice. But there might be even more than that, according to Chicago attorney Syed Hussein, who is leading the class action litigation.
Syed told me on Friday that his firm had more than 250 signups from laid off employees within 12 hours of posting a sign up form.
He says he hasn’t heard anything official about a rumored Chapter 7 liquidation for Outfox stores. A Chapter 7 case would mean that Outfox is throwing in the towel and completly liquidating its stores. A Chapter 11 case would allow it to restructure under bankruptcy protection.
In either case, employees would be considered secured creditors, and they would be in line to receive all the pay and benefits that they are owed.
However, they may have to fight for them. You might remember the situation faced by employees at the Signature Room, high atop the John Hancock Building, which closed abruptly last fall. This month, 132 workers won a $1.5 million lawsuit, according to Eater Chicago.
A federal judge ruled that Infusion Management Group broke Illinois law by under the WARN Act. The lawsuit works out to about $11,000 per person, if divided equally.
What it means for other restaurant businesses
You might ask: why would an employer try to outrun WARN? The first reason could be that it doesn’t have the cash on hand to pay its lenders, let alone employees.
Since it can take months for the case to travel through the courts, the employer may be counting on liquidation to raise enough to cover the outstanding debt and make employees whole.
Another reason is that it doesn’t think the courts will catch up to it — obviously not the case in Chicago. But at least, a sudden shutdown allows it to buy time.
Nobody knows why Outfox didn’t seek Chapter 11, which allows it to keep operating while it terminates or renegotiate leases. The answer might be that it didn’t think staying in business was a viable option. It’s possible that a buyer doesn’t want to deal with a restructuring and will only take over Outfox’s assets in Chapter 7, which is basically a fire sale.
The move was clearly devastating for Outfox employees, some of whom were told in the middle of the shifts that they were losing their jobs. Customers gathered outside the stores in bewilderment. Some of them came away with wine and other food that employees handed through the doors, until they were told to stop.
The situation could have repercussions for other food businesses that are in trouble or that have decided to close. As I mentioned in CulinaryWoman, analysts are watching to see what happens with Red Lobster.
While there’s speculation that the seafood chain will seek bankruptcy protection, there’s also a report that it might find a buyer instead. A company its size — the chain has more than 600 restaurants — would have to file a WARN notice, and would face implications in individual states was well.
If anyone thinks things have finally calmed down in the restaurant world, they are mistaken. All those closed Foxtrot Markets are a reminder.
Convenience Stores Are Seeing Strong Business
Turning to a happier situation, some of the country’s convenience store chains are enjoying a strong year. Between March 2023 and April 2024, convenience stores (aka C-stores) outperformed other types of retailers, according to Placer.ai, a market analysis firm.
“Chains like Casey’s, Maverik, Buc-ee’s, and Rutter’s are investing in both in their product offerings and in their physical venues to transform the humble C-Store from a stop along the way into a bona fide destination,” the report said.
Over the past year, visits per typical convenience store location rose an average 1.8 percent, Placer.ai said. However, Casey’s saw the average number of visits to each of its locations increase by 2.3 percent, while Maverik, Buc-ee’s and Rutter’s saw visits per location increase by 3.2 percent, 3.4 percent and 3.9 percent, respectively.
Convenience stores sell a ton of food and beverages. Last year, the stores’ total revenue was nearly $860 billion, with about $328 billion coming from items to eat and drink. Lately, convenience stores have been touting items such as breakfast, coffee drinks and freshly made sandwiches to attract customers. Their aim is to be an alternative to traditional restaurants.
You might not think of them as an option yet. But in Japan, Korea and other parts of Asia, convenience stores have gained ample fanbases for their food and beverage lineups. Things are definitely headed in that direction here.
Paris Crowns Its New King Of Baguettes
Every year, there’s a competition among bakers in Paris to produce the city’s best baguette. It is a serious matter that can mean fame and fortune for the winner.
This year’s king of baguettes is baker Xavier Netry of the Utopie bakery, who was selected as the 31st winner of Paris’ annual Grand Prix De La Baguette. His loaf beat out 172 others, according to PBS Newshour.
Competing baguettes were evaluated for taste, look, texture, airiness and the quality of the baking. The prize is worth 4,000 euros ($4,290) and Utopie becomes one of the suppliers of the presidential Elysee Palace for a year.
Xavier, who is from Senegal, said his baguette strategy includes a good sourdough starter and “a good long fermentation,” careful temperature and “some love and some passion, of course.”
Would You Eat At A Kid-Free Restaurant?
There’s a constant debate over whether children should be banned from first class on airplanes, as readers of
work know. But, how would you feel about banning them from restaurants?In Australia, child-free restaurants are a growing trend, reports Delicious Australia Magazine. Kin Dining and Bar, a newly opened restaurant in a Sydney suburb, has introduced a blanket no-kids-allowed rule.
The Gidley in Sydney’s central business district does not admit anyone under the age of 18. Quay allows children over the age of seven but does not offer a kid’s menu, while Mjolner in Surry Hills, another Sydney neighborhood, only allows customers over the age of 10.
According to Kin’s chef-owner Peter Wu, the response has been overwhelmingly positive from parents and non-parents alike.
“We get a lot of feedback from the current regulars that come back again and again, that during dinner time, when they’re out to enjoy a nice meal or a few wines and cocktails, it’s nice to be able to get away from a noisy toddler in the corner, or a crying baby or a loud iPad,” he tells the magazine.
How would you feel about child-free restaurants? Attractive idea or a turnoff?
Keeping Up With CulinaryWoman
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