Boloco Re-Opening Update – August 25, 2020

BOLOCO UPDATE:
August 25, 2020

Dear Boloco Stakeholders,

While I realize I’m supposed to be able to steer this ship after so many years at the helm (whether as CEO or Chair), I continue to feel very little control over the direction we go from one day to the next.  A few weeks ago I could not see past August 14, and until yesterday our possibly permanent (but definitely temporary) closing date for all restaurants was August 28, this Friday.

With advice from counsel and others, we will now continue into September operating the two restaurants currently open – Lynnfield, MA and Boston Children’s Hospital. Both restaurants did over $20,000 last week and with the informal rent deals in place they not only make money but cover much of the remaining overhead costs. We continue to cut expenses not directly related to the operations of open restaurants, and sadly that includes all but one of our corporate team, who had already taken a 50% pay cut in return for working 3 days per week. We are looking at reducing and removing everything possible from our ongoing expenses. It is brutal having these conversations and negotiations as I know many of you know.

The three main triggers that would cause Boloco to close all restaurants and move into wind down mode, which right now still seems likely, are as follows:

1)    We knowingly purchase food, supplies, labor, or other services that we won’t be able to pay for. While our Accrued debts are significant, we are in fact able to pay today for items and services that were purchased in the past 7 days which keeps our partners working with us to help us find a path over these hurdles. But if we can’t pay for items we order today, we would need to shut down.

2)    A landlord (since we are in arrears with all of them) takes legal action and gets a court to remove all of the monies from our bank accounts per the terms of the lease. We don’t anticipate this in the immediate future, but a few of the landlords are getting impatient. We have received 2 default letters out of 7, though they both indicate willingness to work with us.

3)    Mental aggravation, stress, day-to-day challenges on staffing in the company based on such uncertainty becomes so high that we determine its time to concede and wind down. I have personally felt this way on numerous occasions these past few months, but so far there has always been a concrete reason to keep going. So we go.
 
Staying open buys us time to continue to work through some of the options we are presently working on. As a reminder:

1)    Partner/Merge with (—-) in Boston (full tour conducted last Friday in Boston). Concerns are significant on their part but its still alive for today.

2)    Potential acquisition from one of two interested parties brought to us by (—-). Have had in-person meetings and calls since my last correspondence to each of you. I view both as unlikely but want to exhaust them as possibilities.

3)    EIDL application still in process and the SBA thinks it could be a few more weeks to receive a response.

4)    Congress returns approximately September 14 and I believe another round of PPP will be necessary, which would help our cause and not only allow us to continue but open at least two of our currently closed restaurants.

5)    Work out percentage rent deals with all of our landlords which, alone, could allow us to lift the very thick fog from this fall, winter and beyond.

Thank you for taking time to read this. I wouldn’t call it good news, right now it feels like we are delaying the inevitable at low risk to potentially unlock some value that will not be available if we simply shut it all down today.

As always please contact me with questions or suggestions.

Gratefully,

John Pepper
Co-Founder and Chief Worker Advocate

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