Popular Southern California cafe chain files for bankruptcy

A popular Southern California chain known for its brunch has filed for bankruptcy, becoming the latest victim of a tough-to-navigate retail market.

The Encino-based upscale casual restaurant chain Marmalade Cafe filed for Chapter 11 bankruptcy protection on Sept. 2.

In the filing, Marmalade Cafe Chief Executive Juan Salcedo listed the cafe’s estimated assets and liabilities at between $1 million and $10 million and said that it owes more than $1 million to Gilmore Farmers Market, US Foods, the California Department of Tax and Fee Administration and others.

As of the filing date, Marmalade Cafe was operating locations in El Segundo, Malibu, Sherman Oaks and Westlake Village.

According to Marmalade Cafe’s website, the chain’s original outpost opened in Santa Monica in 1990. The 1,400-square-foot store had limited seating and offered a full bakery, salads and entrees.

Three years after the Santa Monica location opened, the cafe introduced a full-service location in Malibu with 100 seats. Over the years, the restaurant evolved from a grab-and-go cafe to offering private dining rooms for patrons and catering for L.A. businesses such as Boeing, Mattel, CBS and Warner Bros. Studios.

But this year, Marmalade Cafe has been closing locations.

In a July social media post, the cafe announced it was closing its location at the Commons at Calabasas after nearly three decades of operation.

“Unfortunately, the ongoing construction throughout the shopping center has resulted in a devastating decline in business,” the restaurant wrote in a statement. “Despite our best efforts to weather these challenges, and after seeking rent relief from our landlord during this extended construction period, the landlord declined to help. With construction expected to continue for an extended period, we simply cannot sustain the financial losses any longer.”

Lindsay Arnold, Marmalade Cafe’s director of operations, said mounting losses from the chain’s Calabasas location, where rent ran just under $80,000, was a main catalyst for the filing. According to Arnold, the construction project at the Commons, which started earlier this year, reduced monthly sales by $50,000.

As the construction zone expanded, it “completely destroyed” the parking lot, a devastating turn for a breakfast and lunch business that depended on quick turnover.

“By about May and June, we were like, ‘This is going to sink our whole company. We can’t do this,’” Arnold added.

Caruso, the developer behind The Commons at Calabasas, did not immediately respond to a request for comment.

Compounded by losses due to last year’s Palisades fire, Marmalade Cafe’s Santa Monica location also shuttered in July after moving from its original Montana Avenue location, which closed in May 2024.

Earlier in the year, its Original Farmers Market location also closed its doors after struggling to regain pre-pandemic momentum.

Marmalade Cafe is joining the ranks of other California restaurant chains that have filed for bankruptcy this year.

FAT Brands, the Beverly Hills-based parent company of Fatburger, Johnny Rockets and other well-known chains, filed for Chapter 11 bankruptcy earlier this year. In April, one of California’s largest Carl’s Jr. franchisees, the La Palma-based Friendly Franchisees Corp., also filed for Chapter 11.

Despite the headwinds, Arnold is optimistic about the four remaining Marmalade Cafe locations, which she said are “very healthy and very strong.”

“Their fate and our hope is that they remain open,” she said. “These are really long-term, established community places, and we really feel strongly that those stores will stay open.”