A national restaurant chain once headquartered in Chattanooga has laid off nearly 18,000 employees across the country as the bankrupt company struggles to cope with restaurant shutdowns ordered to limit the spread of the coronavirus.
CraftWorks Holdings, which filed for bankruptcy last month ahead of the forced restaurant closing due to the COVID-19 virus, laid off most of its staff this week at its 261 eateries after putting the workers on furlough in early March, the Wall Street Journal reported. The Nashville-based company has also terminated its employee benefits plans.
"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," CraftWorks told employees in a memo cited by the Journal.
CraftWorks acknowledged in a bankruptcy court filing last week that it had "laid off" most workers and shut down its restaurants, including Big River Grille, the Chop House and Logan's Steakhouse in Chattanooga, in response to regulations several states have imposed to stem the spread of the deadly coronavirus.
CraftWorks is retaining fewer than 25 employees and is cutting expenses "to the bare minimum" with the goal of reopening previously profitable restaurants once the virus crisis subsides, the company said in a court filing last week. The Wall Street Journal said about half of its eateries may be closed for good.
"We are doing everything possible to reopen in the future once this national crisis passes. It breaks our hearts to be in this position," CraftWorks chief experience officer Josh Kern told The New York Post in an email.
Craftworks Holdings, which formerly had its headquarters on Main Street on Chattanooga's Southside, merged with with Logan's Roadhouse to create the multi-brand restaurant entity, CraftWorks Holdings, led by Logan's CEO Hazem Ouf.
Craftworks is the leading operator and franchisor of steakhouses, brewery and craft-beer focused casual dining restaurants in the U.S. In addition to Logan's and Old Chicago, CraftWorks' concepts include Rock Bottom Restaurant & Brewery, Gordon Biersch Brewery Restaurant Group and ChopHouse.
At one time, the company also operated the Bluewater Grille in Chattanooga.
The layoffs by CraftWorks this week come after Ouf was fired as CEO of the company 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, according to a court filing.
CFO Jim Lebs was also dismissed, the documents indicate.
Casual-dining veteran Marc Buehler is now CEO, according to an email cited by the trade publication Restaurant Business.
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