When a business self-limits its audience, it makes its chances for success more challenging. Yes, that niche crowd might aggressively support you, but finding broader support may prove elusive.
That has broadly been the case with restaurants serving very specific audiences. Whether you target a kosher, gluten-free, halal, vegetarian, or vegan audience, an eatery generally needs to appeal beyond that core crowd to achieve sustainability.
“Vegan restaurants face hardships that often mirror those of nonvegan establishments, including rising rent and operating costs. But those challenges are compounded by a limited clientele and, in some locations, the high prices of plant-based protein alternatives like Beyond Meat and Impossible Foods,” Bloomberg Law reported.
Only 1% of Americans identify as vegans, according to Gallup, while the same poll showed that 3% consider themselves vegetarian. That means a vegan restaurant, unless it’s in a very large city, needs to appeal to non-vegan customers.
That has been a major challenge that has recently driven a number of vegan and vegetarian chains into bankruptcy. Planta, a pioneer in the vegan space, has been under Chapter 11 bankruptcy protection.
It has now been forced into Chapter 7 bankruptcy and will be liquidated.
Planta moves into Chapter 7 liquidation
Planta’s website makes no mention of any sort of bankruptcy and still shows seven operating locations. The chain’s Facebook page also does not acknowledge the filing or the change in bankruptcy status, but documents on PacerMonitor confirm it.
“A Delaware bankruptcy judge has ordered the Chapter 11 case of vegan restaurant group Planta to be converted to a Chapter 7 liquidation, after the debtor said it has no other option,” Law360 reported.
The chain has not publicly commented on the shift to a Chapter 7 bankruptcy nor did it immediately respond to a request for comment from TheStreet.
David Carickhof has been appointed as interim trustee to oversee the Chapter 7 bankruptcy process, according to a notice filed on PacerMonitor on March 9.
What happened in a Chapter 7 bankruptcy
“A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13 (or Chapter 11). Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code,” according to the USCourts.gov website.
Related stories:
- 22-year-old fast-food burger chain closes locations in bankruptcy
- Restaurant chain closed 50% of locations in Chapter 11 bankruptcy
Unlike a Chapter 11 bankruptcy, where efforts are made to find a path for the company to continue as a going concern, a Chapter 7 filing is about maximizing the amount of money returned to creditors.
“The division of proceeds is made according to the hierarchy of the claimants’ rights,” according to Cornell Law.
Planta
A quick look at Planta’s struggles
Planta always faced a challenging market.
“Despite hopes that burgers, sausages and chicken made from soy, peas and beans would curb Americans’ love of eating butchered animals – thereby reducing the rampant deforestation, water pollution and planet-heating emissions involved in raising livestock – these alternatives languish at just 1% of the total meat market in the US,” The Guardian reported.
- Plant-based restaurant chainPlanta filed for Chapter 11 bankruptcy on May 12, 2025, through its parent company CHG US Holdings and 17 affiliated entities in the U.S. Bankruptcy Court for the District of Delaware, according to documents on PacerMonitor.
- The bankruptcy filing reported very limited assets of roughly $50,000 to $100,000 compared with liabilities estimated between $10 million and $50 million, reported PacerMonitor..
- The company said the filing was intended to restructure operations as declining consumer spending on dining out pressured the business, according to Reuters.
- Planta began closing locations as part of the restructuring, including sites in West Palm Beach, Miami Beach, Los Angeles (Brentwood), and Atlanta’s Buckhead neighborhood, according to TheStreet.
- The chain had expanded quickly after launching in 2016, operating restaurants in cities including Miami, New York, Chicago, Washington D.C., Los Angeles, Atlanta, and Toronto, according to Reuters.
- The company eventually emerged from bankruptcy through a sale of its assets, with the brand continuing operations at a reduced footprint of about eight locations, according to Nation’s Restaurant News.
- A Delaware bankruptcy judge converted the Chapter 11 case of vegan restaurant chain Planta to a Chapter 7 liquidation after the company said it had no remaining path to reorganize, reported Law360.
- The conversion means a court-appointed trustee will now take control of the case and liquidate remaining assets to repay creditors, added Law360.
Joseph Barsalona, a Pashman Stein Walder Hayden partner representing Planta, said the chain’s upscale dining appeals to a narrow niche of a limited clientele. He also noted a broader decline in demand for plant-based offerings, Bloomberg Law reported.
“Veganism is not going away, but it’s not going to be generally accepted amongst regular burger-eating Americans, and so some of these stores never even got off the ground,” he added.
Vegan/plant-based restaurant closures in 2025
“Planta’s rapid construction of 12 restaurants in three years exacerbated pandemic-induced disruption and other macroeconomic headwinds,” Restaurant Dive reported.
The current operating environment has made an already challenging market even more difficult for plant-based restaurants.
“When customers have uncertainty and they’re really watching every dollar, the cost of things becomes more important, which puts specialty outlets perhaps at a competitive disadvantage,” Jason Kaplan, CEO of restaurant and hospitality consulting firm JK Consulting. told Bloomberg Law.
Planta is not the only player in the space facing large challenges:
- Plum Bistro (Seattle, WA): Flagship vegan spot, plus Plum Chopped, closed in Jan. 2025.
- Paradox Cafe (Portland, OR): Longtime vegan-friendly diner, closed in 2025.
- Fair Weather (Portland, OR): Vegan/pescatarian brunch spot, reopened briefly but then closed permanently in July 2025.
- Sage Regenerative Kitchen & Brewery (Pasadena & Echo Park, CA): Formerly Sage Vegan Bistro; closed in Jan 2025 after reintroducing animal products.
- Veggie Grill: Closed 12 locations (about 40% of units) in 2025 as part of restructuring.
- Neat Burger: Backed by Lewis Hamilton & Leonardo DiCaprio: Closed all UK locations in April 2025, entered liquidation in July 2025.
Related: Iconic brewpub chain shutters 39 locations amid bankruptcy wave
