The encyclopedia · Finance & Accounting · Financial decision · 2016
Così tried to reinvent its menu — it went bankrupt and closed 29 stores instead
The flatbread-sandwich chain shrank from 151 locations toward a dozen over two separate bankruptcies, as changing lunch habits outran every menu fix it tried.
Cosi · 2016-09-28
What happened
Così built a fast-casual chain around its own flatbread, growing to more than 150 locations at its peak known for made-to-order sandwiches. As sales declined through the 2010s under pressure from newer fast-casual chains and changing lunch habits, the company attempted a menu overhaul to win customers back.
The menu rework did not reverse the decline. Così filed for Chapter 11 bankruptcy in September 2016, listing $31.2 million in assets against $19.8 million in debts, and closed 29 of its 74 company-operated stores at the time of the filing, cutting 450 jobs. Its 31 franchised locations stayed open, run independently of the corporate restructuring.
The company exited that bankruptcy in 2017 after being purchased, but the underlying problems weren't solved: Così filed for Chapter 11 a second time in February 2020, citing changing consumer dining habits. The chain continued shrinking afterward, falling from its 151-location peak toward roughly a dozen locations.
Why it happened
- A menu overhaul addressed the product without addressing the deeper shift in where and how customers were choosing to eat lunch, so it didn't reverse the sales decline.
- Così filed for bankruptcy twice within four years, showing the first restructuring never fixed the business model, only bought time.
- $19.8 million in debt against $31.2 million in assets by 2016 reflected years of accumulated losses the company had not addressed early enough.
- Competing fast-casual chains kept expanding through the same period, showing the format itself wasn't the problem — Così's specific execution and positioning were.
The lesson
A menu or product refresh cannot fix a chain whose real problem is that customer habits have moved on from the format entirely.
Aftermath
Così exited its 2016 bankruptcy under new ownership but continued to decline, filing for Chapter 11 again in February 2020. The chain operated a small fraction of its peak store count in the years that followed, a shadow of its once 150-plus-location footprint.
Sources
- Cosi files for bankruptcy protection, has closed 30 units — Restaurant Business
- For the second time, fast-casual chain Cosi files for bankruptcy — The Boston Globe
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