Bankrupt fast casual Roti is officially up for sale via auction.
A public notice was posted by Ravinia Capital, the brand’s exclusive investment banker. All 19 locations across Chicago (10 stores), Washington, D.C. (six stores), and Minnesota (three stores) are up for sale, in addition to intellectual property, operational know-how, equipment, and other assets. The assets will be sold free and clear of any liabilities.
A minimum bid of $3.5 million is required if the party is interested in all locations. Lower minimum bids and deposits will be negotiated and accepted from pre-qualified purchasers interested in acquiring particular markets or individual locations, according to Ravinia Capital.
The deadline for submitting bids is November 7. The auction will take place on November 11. The preference is that a buyer takes all 19 locations. If not that, someone who takes at least the Chicago and Minneapolis markets. The company would also entertain “attractive” bids for specific locations, Ravinia said.
Roti filed for bankruptcy in late August after suffering from higher costs, inconsistent location performance, and tough macroeconomic conditions, according to CEO Justin Seamonds. The brand was disproportionately impacted by COVID since 50 percent of its footprint is based in downtown trade areas. In April 2021, the company was forced to close 14 of its 42 locations. The chain faced challenges from losing pandemic rent deferrals and dealing with other lease obligations despite almost all units being cash flow positive.
The concept earned $25.7 million in revenue in 2023, or about $1.35 million per unit. Same-store sales lifted 8 percent year-over-year. The chain expects $23.5 million in revenue for 2024. Store-level earnings were $2.9 million in 2023 and are projected to be around $3.3 million in 2024. Revenue and earnings for 2025 are projected to grow over 2024 levels, Ravinia said.
The chain streamlined its menu, with bowls mixing 70 percent. In terms of sales channels, dine-in accounts for 54.5 percent of sales, followed by catering (19.9 percent), third-party delivery (17.2 percent), and digital (8.3 percent). Store margins have grown to 12 percent thanks to the expansion of catering and online app orders.
Average transaction size has increased 15 percent over the past 18 months. Additionally, Roti has approximately 200,000 active loyalty members.
Roti was founded in 2006. In 2018, it received a $23 million equity investment led by Chicago-based Valor Equity Partners. At its peak in 2019, the brand had 42 stores across six markets and generated more than $50 million in revenue. In February 2020, the company hired Seamonds as CEO.
