In a sudden move that stirred both customer frustration and legal repercussions, urban convenience-store chain Foxtrot Market and small-format grocer Dom’s Kitchen & Market began shutting down all their locations. This dramatic decision unfolded less than six months after the two brands merged and transitioned into the newly formed entity, Outfox Hospitality, at the close of the previous year.
The Boom of Restaurant Chains
Throughout the early 2020s, many restaurant chains experienced explosive growth, expanding from a handful of outlets to national presence, especially in bustling, high-rent urban districts with a strong demand for both quality and convenience. However, dealing with the post-pandemic landscape proved to be less straightforward.
Economic Challenges Post-Merger
One prominent example of this downturn is the combined entity of Foxtrot and Dom’s Kitchen & Market. Despite their merger in late 2023 and their rapid expansion across key cities like Washington, D.C., Texas, and Chicago, they faced harsh economic realities.
Catering to Urban Shoppers
Offering a range of urban conveniences—from freshly made sandwiches and baked goods to organic wines and health supplements—the chains seemed to cater well to the urban shopper.
$18 Million Debt
In 2023 alone, the company secured over $18 million in debt financing and expanded to 33 locations nationwide. Yet, the changing economic tide proved too challenging, leading to their abrupt closure.
Bankruptcy Announcement
Only five months after their ambitious merger, Outfox Hospitality faced a challenging turn of events, resulting in the announcement of Chapter 7 bankruptcy.
This abrupt news was relayed to the corporate staff during a conference call on the morning of April 23, with the directive that all stores would cease operations by noon that day.
A Thousand Jobs Lost
Based in Chicago, Outfox Hospitality employed about 100 full-time corporate staff, alongside approximately 1,000 other employees across various market locations in Texas, Illinois, and the greater Washington, D.C., area.
Regretful Closure
In their communication, the company expressed deep regret over the decision, emphasizing that it was not made lightly. They acknowledged the surprise and inconvenience this sudden closure might cause and expressed gratitude for the understanding and support from their employees during such a difficult period.
This closure marked a stark and rapid decline for a company that had shown significant potential and growth shortly before its abrupt end.
Employee Shock
The news came as a shock to many, especially employees like Monica Perez from Dom’s Kitchen & Market in Chicago, who discovered the closure only upon arriving at work, without any prior notice from management.
The Last Day Chaos
Allegations have surfaced that many market workers at Outfox Hospitality were not informed about the imminent closures, leading to chaotic scenes where employees had to quickly usher customers out to meet the sudden noon shutdown deadline.
Free Wine During Store Closures
In some stores, workers reportedly took to distributing free bottles of wine to customers as they announced the closure. In Washington D.C., for instance, surprised patrons at a downtown store received free wine as part of the shutdown process.
Local Dismay
The impact of the abrupt closure was felt deeply in local communities. In Chicago, residents expressed their dismay; one individual noted how the presence of a Foxtrot store had influenced their decision to move to the neighborhood.
Similarly, in Dallas, customers found themselves being escorted out of Foxtrot coffee shops mid-morning, creating a surreal experience for those caught unawares.
The Ripple Effects of Service Cessation
The abruptness of the situation was compounded as grocery delivery services ceased, mobile apps were disabled, and store credit cards were deactivated. Additionally, account credits and member perks were rendered useless, adding to customer frustrations.
Legal Response to Sudden Shutdown
The day following the unexpected shutdown of 33 Foxtrot stores and two Dom’s Kitchen & Market locations, a lawsuit emerged targeting the parent company, Outfox Hospitality. This class-action lawsuit, reported by Block Club Chicago, represents a swift legal response from the now-unemployed workers.
A significant plaintiff in this case is an employee from a Foxtrot store in Chicago’s Old Town, close to the recently opened second Dom’s location.
WARN Act and Legal Obligations
The lawsuit invokes the Worker Adjustment and Retraining Notification (WARN) Act, legislation that mandates employers to provide a 60-day advance notice to workers in the event of significant layoffs or store closures, although there are exceptions for scenarios like unforeseen business circumstances or if the company is faltering.
Seeking Compensation and Jury Trial
The legal action seeks compensation for all unpaid wages, accrued holiday, vacation pay, and other benefits that the employees would have earned during the required notice period.
Furthermore, the plaintiffs have requested a jury trial to deliberate on these claims, indicating the seriousness of the breach and the impact on affected employees.
Leadership Changes and Merger Volatility
Reflecting on the past six months, the timeline has been fraught with volatility for both entities. Following a surprise merger announcement in late November 2023, the newly formed Outfox Hospitality witnessed several significant leadership shifts.
Urban Growth and Ambitious Plans
Founded in 2014 by Mike LaVitola and Taylor Bloom, Foxtrot expanded to 33 urban locations across major cities including Chicago and Washington, D.C., bolstered by substantial Series B funding.
Dom’s Kitchen & Market, started in 2021 by grocery industry veterans, was also on an expansion path with new locations planned, reflecting the ambitious growth that was suddenly curtailed.
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Kate Smith, a self-proclaimed word nerd who relishes the power of language to inform, entertain, and inspire. Kate's passion for sharing knowledge and sparking meaningful conversations fuels her every word.