Distressed Marmalade Cafe Files for Chapter 11

Los Angeles’ volatile fast-casual dining scene has lost another native when Encino-based Marmalade Cafe filed for Chapter 11 bankruptcy Sept. 2.

The Santa Monica-founded diner traced its roots back to 1990, when Selwyn Yosslowitz, Robert Burns Jr. and Bonnie Burns opened the first location on Montana Avenue. Known for its California-inspired cuisine, it soon expanded into eight branches across Los Angeles County, including in Sherman Oaks, Malibu and El Segundo.

After receiving an undisclosed investment from Dallas-based private equity firm Parallel Investment Partners in 2007, the brand was poised to expand outside Southern California – a plan that never materialized. Its performance further suffered after the COVID-19 pandemic, closing two stores in 2024 and two more this year.

“Unfortunately, the ongoing construction throughout the shopping center has resulted in a devastating decline in business,” the cafe posted on Instagram when its Calabasas branch closed at The Commons at the end of July, having operated for almost three decades. “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.”

Assets vs. liabilities

The filing, received by the U.S. Bankruptcy Court for the Central District of California, further detailed an estimated assets and liabilities between $1 million and $10 million. Marmalade’s biggest debtors include Gilmore Farmers Market, US Foods Inc. and the California Department of Tax and Fee Administration.

Marmalade is not the only L.A.-founded restaurant concepts that struggle in a slow economy. Beverly Hills-based FAT Brands Inc. filed for bankruptcy in February. Sprinkles Cupcakes also shuttered all physical locations at the end of last year and went out of business, after its founder Candace Nelson in 2012 sold the bakery chain to Connecticut-based private equity firm KarpReilly.