Could Punch Bowl Social Be the First Corporate Coronavirus Casualty?

Punch Bowl Social, a 23,000-square-foot restaurant and entertainment venue, opened in Wynwood this past Leap Day with a party featuring Questlove and a global pandemic brewing.

Now, the Wynwood spot, along with its 19 sister locations throughout the United States, might be among the first corporate casualties of the new coronavirus.

In late March, FSR Magazine, a trade publication that caters to the full-service restaurant industry, reported that the chain had closed all of its locations and laid off most of its restaurant and corporate staff.

Though many restaurant chains are closing temporarily and laying off employees, Punch Bowl Social's majority owner, Cracker Barrel, announced it would not invest further resources to prevent the foreclosure of Punch Bowl Social. In July 2019, Cracker Barrel had purchased approximately 58.6 percent of the economic ownership interest in PBS Holdco, which owns and operates Punch Bowl Social. The equity investment was valued at around $79.5 million.

In an SEC filing dated March 25, Cracker Barrel Old Country Store Inc. noted its intent to concentrate its resources on its core business of owning and operating Cracker Barrel restaurants "in light of the substantial uncertainties surrounding the Punch Bowl Social business coming out of the pandemic." The Tennessee-based company, founded in 1969, has more than 650 Cracker Barrel stores in 45 states.

The filing confirms that Cracker Barrel closed all Punch Bowl Social locations and laid off most of its restaurant and corporate staff. The filing stated that the company's unnamed primary lender declared its intent to foreclose unless Cracker Barrel agreed to guarantee the debt or pay it off.

In a statement issued to FSR, Punch Bowl Social founder and CEO Robert Thompson said he was collaborating with lender CrowdOut Capital LLC for funding to reopen. “None of us could have prepared for COVID-19, which has had, and will continue to have, massive economic and public health impacts across the world," Thompson stated. "The restaurant industry has been one of the hardest hit, and we were not immune."

Thompson did not immediately respond to New Times' requests for comment.