By Hallie Hymovitch.
Sam Fox—a household name behind many of the Valley’s most popular dining and hospitality establishments—founded True Food Kitchen in Phoenix, Arizona, in 2008, alongside Dr. Andrew Weil. However, after growing to 46 locations across the country, the restaurant filed for Chapter 11 bankruptcy in Houston on October 4, 2026.
The health-focused restaurant reported approximately $42 million in debt and closed 12 restaurants overnight. The Phoenix, Scottsdale, and Tucson locations remain open. It is tempting to treat True Food as simply another business bought by private equity and subsequently forced into bankruptcy, but that oversimplifies the story.
Sam Fox’s Exit
When True Food was born it was backed by a power duo. The menu was built around Dr. Weil’s anti-inflammatory food pyramid, while Fox brought the hospitality expertise behind Fox Restaurant Concepts.
The health-conscious concept grew fast in popularity, which subsequently attracted outside investors. P.F. Chang’s provided a $10 million loan to support restaurant expansion, with a right to convert the loan into a majority equity ownership position. In 2012, when True Food had just four locations, P.F. Chang’s exercised that right. A few months later, private equity firm Centerbridge Partners bought P.F. Chang’s for $1.1 billion, including P.F. Chang’s interest in True Food Kitchen and Pei Wei Asian Kitchen. From that point forward, the business was no longer the four-restaurant concept that Fox had sold to P.F. Chang’s. It had become a national chain controlled by private equity, which was a result Fox never bargained for when selling his stake to P.F. Chang’s.
True Food’s Growth Under Private Equity
It is no secret that private equity’s playbook is scaling fast, and that’s exactly what happened here. Over the next several years, True Food experienced 868% sales growth. The company then launched a three-year plan to double its unit count. The timing was unfortunate, as this planned growth period coincided with the COVID-19 pandemic. However, the company continued to grow, just slower than it had hoped. Sales peaked in 2024 at $314 million, with 46 locations in True Food’s portfolio. However, in 2025, sales dropped to $312 million. Less than a year later, the company found itself in bankruptcy court.
True Food’s economic decline did not occur until over a decade after Fox sold his share. Therefore, perhaps the better question is not whether private equity was bound to taint the True Food brand from the start, but rather if the rapid growth that the restaurant experienced under private equity could not handle a plateau.
Where Did True Food Go Wrong?
In the initial filings, Chief Restructuring Officer Nathan Cook attributed the bankruptcy partially to heavy management turnover. This includes the company’s growth plans, brand identity, and continuous menu changes. Frequent leadership changes led True Food to stray from its original menu and mission, instead investing in product lines and restaurant concepts that were largely unsuccessful. None of this is to say that the investors here acted improperly. However, the private equity model rewards speed and expansion, whereas lasting brands are usually built slowly and steadily. These two interests are often at odds with one another.
What Lies Ahead for True Food?
Although True Food is headquartered in Scottsdale, it filed in the U.S. Bankruptcy Court for the Southern District of Texas, which has become a popular venue for large corporate restructurings. Judges there are experienced with complex restructurings, and dockets move quickly and in a predictable manner. Not only does this help keep costs down, but it preserves liquidity. Federal venue rules are also flexible, meaning out-of-state companies like True Food can file in Houston based on minimal local ties, such as having a Texas office.
To keep the lights on during the bankruptcy process, HumanCo gave True Food $20 million in debtor-in-possession financing. HumanCo is no stranger to the company, as it co-led True Food’s 2022 investment round. Insiders frequently fund companies in bankruptcy, often because no one else will. When the company is eventually sold, that lender has an advantage because it can credit bid using the debt it is already owed. However, courts and creditors’ committees keep an eye on these deals to ensure the sale is fair.
True Food plans for a court-supervised sale to find a new, long-term partner aligned with its mission. Under Section 363 of the Bankruptcy Code, a buyer can take assets free of most liens and other interests, which will make it easier to sell True Food. However, unsecured creditors, such as landlords of the closed restaurants, may only get a portion of what is owed to them. A bankruptcy judge in Texas will have to approve True Food’s next owner, and HumanCo—which is both an investor and the lender funding True Food through bankruptcy—may be best positioned to acquire it.
Things to Ponder
Looking at Sam Fox’s career offers a useful comparison. On one hand, Fox sold True Food to P.F. Chang’s, and the brand was soon acquired by a financial buyer: a private equity firm that bought it to resell at a profit. On the other hand, two of Fox’s other restaurant concepts, Flower Child and North Italia, were sold to a strategic buyer. The Cheesecake Factory took a majority stake in both and later acquired the rest of Fox Restaurant Concepts.
A strategic buyer such as The Cheesecake Factory purchases restaurants to run them, and intends to own them indefinitely. Meanwhile, a financial buyer is an investor with a plan to eventually exit. Neither buyer is necessarily better than the other, but they want different things, and those differences surface years after acquisition.
When restaurant founders weigh an offer, they have some things to keep in mind. First, once founders give up control their vision for the restaurant becomes a mere suggestion, not an order. Second, if the buyer plans to sell in a few years, it will push for quick growth to meet that deadline. Third, founders should think about how that growth will be financed. Money from investors, bank loans, and cash advances each come with different strings attached. Fourth, founders should consider how long they will stay on after the sale. That timeline, as well as what role they play during the transition, affects how well they are able to protect the integrity of the brand they built.
True Food grew from a local Phoenix restaurant into a national chain, which is a success story many restaurateurs can only dream of. While filing for bankruptcy gives the brand a second chance, perhaps the ultimate survival of the restaurant depends on whether True Food returns to the original mission that made customers love it in the first place.
Hallie Hymovitch is a second-year law student at the Sandra Day O’Connor College of Law and a Staff Writer on the Arizona State Law Journal. A Paradise Valley, Arizona native, she earned a B.A. in political science with a minor in economics from Bucknell University before law school. Outside of school, Hallie enjoys traveling and finding new restaurants.
