Taylor Gourmet will close all 17 of its DC-area stores after Sunday, September 23. Friday is the last day for the hoagie chain’s two Chicago stores. The closures come as Connecticut-based private equity firm KarpReilly, which infused Taylor Gourmet with a reported $5.6 million investment in 2015, pulled out of the company. Owner Casey Patten declined to comment, but a spokesperson confirmed the news. Representatives for KarpReilly were not immediately available for comment.
Multiple sources familiar with the company tell Washingtonian that a Chapter 7 bankruptcy filing is imminent. Nothing has been filed yet, and a spokesperson declined to comment on a potential bankruptcy.
How did we get here? Taylor Gourmet’s official line is that its rapid expansion may have been too much, too fast. Patten told the Washington Business Journal last week that Taylor Gourmet stores were still profitable, but he was considering closing three locations. He blamed changes in the fast-casual world and increased competition driving up real estate prices. He said the problem was that some of the stores had more square footage than they needed.
However, three people familiar with the company say sales began to decline after owner Patten met with President Donald Trump at a small business roundtable at the White House in January 2017. Facing backlash and calls for boycotts, Patten told the Washington Post that he’s apolitical when it comes to business and pointed out he also participated in a roundtable discussion with President Barack Obama in 2012. The restaurant posted a “Less Politics, More Hoagies” sign at its Chinatown shop.
“Our sales dropped 40 percent the next day,” says one source who spoke on the condition of anonymity. “And it persisted and never really got any better.”
A spokesperson couldn’t confirm that number but says the meeting with Trump “contributed” to a downturn in sales. The spokesperson says the company rebounded from the controversy, and it wasn’t the cause of the chain’s demise.
Sources echo that Taylor Gourmet expanded too fast and ended up with some dud locations along the way. One insider also suggests that the constant menu changes have upset guests.
Since its 2008 opening on H Street, the hoagie chain had grown to 17 locations across DC, Virginia, and Maryland, including Reagan National Airport and Nationals Park. It debuted in Chicago at the start of this year. After the investment from KarpReilly in 2015, it nearly doubled its number of stores.
Hints of financial strain have started to drip out recently. The landlord of Taylor Gourmet’s downtown catering kitchen has sued the company twice in recent months. Northwestern Development Company filed an eviction lawsuit in August, claiming more than $7,500 in unpaid rent and fees, but then dropped the case less than two weeks later. The landlord filed a second suit on Sept. 8 for more than $16,000 in unpaid rent and other fees.
Taylor Gourmet’s management team learned of the closures today. “If there are any restaurateurs that are going to be reading this that need some people, we’ve got some good ones,” the spokesperson says.