True Food Kitchen closed 12 restaurants — nearly a quarter of its footprint — after filing for Chapter 11 bankruptcy on Oct. 1 in the Southern District of Texas.

The Scottsdale, Arizona-based casual-dining chain will keep its remaining 34 locations operating through the proceedings. The voluntary restructuring also puts the company up for sale via a court-supervised process, and True Food Kitchen has secured $20 million in financing from investor and holding company HumanCo to fund operations during bankruptcy — including employee wages and benefits, vendor payments and customer programming.

"This process is the best path forward to simplify the business and focus on what we do best: delivering craveable, health-forward food and genuine hospitality," CEO Jeff Chandler said in a statement.

Why did True Food Kitchen file?

The filing follows the chain's first year of negative systemwide sales. Revenue declined 0.7% in 2025, falling to $312 million from a 2024 peak of $314 million, according to Technomic data. The company also closed an underperforming restaurant for the first time last year — a break from its historically growth-only footprint strategy.

The contraction came as Top 500 chain restaurant sales slowed across the industry in 2025, with consumers cutting back on dining. Sectors such as coffee, beverages, snacks and chicken continued to grow, but casual dining bore the brunt of pulled-back spending.

In court filings, the company said it will use the proceedings to "strengthen its financial foundation, optimize its restaurant footprint and cost structure, and accelerate ongoing operational improvements."

Who is running the company?

Chandler took the top job in July, hired away from Hopdoddy. He inherited a leadership vacuum: previous CEO John Williams resigned in December 2024, and Jim Dunn had served as interim chief until January 2026.

The bankruptcy and sale process now put Chandler's turnaround mandate on a court calendar rather than an internal one. HumanCo's $20 million commitment positions the holding company as the likely stalking-horse or anchor bidder as the chain works through the sale, though the source does not confirm a bid.

What stays open?

The 34 remaining restaurants continue to serve customers with unchanged programming, per the company. The 12 closures — roughly 24% of the estate — represent the chain's most aggressive footprint reduction to date and signal that the buyer will inherit a leaner unit base concentrated in stronger markets.

The court-supervised sale will determine whether the health-focused concept gets fresh capital and a new ownership structure, or becomes the latest casual-dining brand consolidated into a larger portfolio.