By Joshua Huff, sports editor
The parent company of Logan’s Roadhouse terminated all of its furloughed employees this past week and cut off their healthcare benefits in what could be the final gasp for the self-prescribed “Real American Roadhouse.”
The news broke on April 1 that CraftWorks Holdings, the corporate owner of Logan’s Roadhouse since 2018, has fired all of its employees along with terminating CEO Hazem Ouf and CFO Jim Lebs. The two executives were fired for “passing along $7 million in sales taxes to states where the company’s various brands were in operation. The funds were passed along surreptitiously, without the knowledge and prior approval of court-appointed supervising parties,” Restaurant Business wrote.
Terminated employees are now left without any access to COBRA, which is the federal program that allows for coverage for a short time to workers who lose their private insurance.
“The status of all team members will be revised from furloughed to terminated,” a CraftWorks Holdings internal document obtained by the Wall Street Journal read. “Please know that we continue to work diligently towards a reopening date and are looking forward to the day when we hope to bring many of you back with a new suite of benefits.”
According to media reports, CraftWorks Holdings intends to “mothball” all of its 261 restaurants due to lack of funds. This follows the company’s lender withdrawing financing to keep the bankrupt company going due to the “unprecedented and unforeseen outbreak of COVID-19,” CraftWorks Holdings said in a court filing.
The terminations impact nearly 18,000 employees.
CraftWorks Holdings filed for Chapter 11 bankruptcy protection in early March, before the coronavirus pandemic swept through the nation. Officials proceeded to alert a federal bankruptcy judge in Delaware that they could not secure funds to keep the company’s restaurants even partially open, and would have to shut down every location. CraftWorks Holdings did add that there’s a possibility of opening its restaurants at a later date.
“The debtors hope that they will be able to restart their operations at some point in the future, but there are many preconditions to a restart, including the obtaining of financing, the hiring of staff, and the ability to create a coherent and profitable business plan,” Craftworks said in a court filing. “The shutdown could persist for a prolonged period time, if not permanently.”
CraftWorks Holdings is also the parent company for Rock Bottom Restaurant & Brewery, Gordon Biersch Brewery Restaurant Group and ChopHouse.