In hindsight, I saw this coming in 2025 after the first group of stores were shuttered. Behind the scenes, a friend of mine and I discussed in depth what was happening on several occasions, revealing how things evolved over the past year. I certainly don’t relish in their troubles but I do think there is something important to learn, now that the dust is starting to settle on the Salad and Go bankruptcy.

Here’s what makes the Salad and Go bankruptcy worth understanding, the concept wasn’t the problem.

The founders built something genuinely strong. By 2020, they had roughly 50 stores in the Phoenix area with reported annual unit volumes of approximately $2 million per store. That’s roughly $100 million in annual sales from a single market, for a drive-thru-only concept with a 700-square-foot footprint. The economics in Arizona worked because the brand was known, the supply chain was established and it could support the needed infrastructure.

Then the concept was sold to investors, the growth targets went nearly vertical, and within a few years the company had filed for Chapter 11 with up to $1 billion in reported liabilities.

Not because the food was bad. Not because the Arizona operation was failing. Because the company made a fundamental error that restaurant operators make at every scale; it assumed that the economics that worked in one market would automatically transfer to markets where none of the conditions that created those economics existed.

That’s the mistake. And it’s not unique to a fast-growing chain. It happens at 4 units. At 8 units. At 15. The stakes are lower but the math is the same.

What the Arizona Business Actually Was

The founders of Salad and Go — Tony and Roushan Christofellis — built a concept with a genuinely clever proposition.  Tiny footprint, drive-thru only, centralized production, fresh ingredients, inexpensive salads, high throughput, no dining room. In Phoenix, it worked.

According to a 2024 investor presentation made by the founders after they had exited the company, the Phoenix operation was producing approximately $2 million in annual unit volume per store. The founders themselves reportedly argued that the business should be expanded in a “very thoughtful, efficient way” and that opening more than 50 stores per year was, in their view, excessive.

They were overruled. The investors wanted more, faster.

This is the starting point that matters. A strong regional concept with real economics, real brand recognition, and a real customer base was asked to become a national chain in markets where it had none of those things.

What Happened When the Growth Went Vertical

Under new CEO Charlie Morrison — recruited from Wingstop, the company set targets of 90 restaurants in 2022, roughly double that the following year, and ultimately talked openly about reaching 1,000+ locations using a hub-and-spoke model. By 2023 and 2024, the company was opening roughly one new restaurant per week. They went into Texas and Oklahoma. Markets where almost no one knew what Salad and Go was.

This created a problem specific to the format. A traditional restaurant can compensate for low brand awareness; signage, indoor seating, destination dining, delivery, multiple directions of visibility. A drive-thru-only concept cannot. The entire loop depends on recognition — you drive by, you see it, you decide you want a salad, you turn in. Without brand awareness, that loop never starts.

The bankruptcy filing reportedly named “low visibility and low brand recognition” in Texas and Oklahoma as factors in the store failures. Their words, in a federal court filing, not an analyst’s opinion.

The new markets also required rebuilding everything that made Arizona work. The supply chain, the distribution infrastructure, the operational experience at scale, the customer habits. None of that transfers automatically. All of this  takes time and money to build in a new market, during which the stores are generating a fraction of the $2M AUV the Arizona operation had proven.

The Fixed-Cost Trap

Here’s the mechanics that makes this math so dangerous.

Each Salad and Go building (710 to 824 square feet, drive-thru specialized) reportedly cost $300,000 to $600,000 to construct. Sign the lease. Build the building. Hire the team. Set up the supply chain. That’s a fixed-cost commitment made before a single dollar of revenue from that market is proven.

If the store produces $800,000 to $1.2 million annually during ramp-up, a reasonable estimate for a new market without brand recognition, but carries the same fixed costs as a mature $2M AUV Phoenix location, the unit economics are significantly decreased. Do that 73 times and then close those stores but keep paying the leases.

That’s where the reported $1 billion in liabilities comes from. Not from bad restaurants in Arizona. From the fixed obligations of an expansion that didn’t produce the expected economics, and couldn’t be unwound cheaply because specialized drive-thru buildings don’t convert to other concepts easily.

Dutch Bros’ parent company agreed to purchase 51 leases and assets for approximately $105 million. That number tells you two things: the buildings had real value, and the economics that work for Dutch Bros, high-margin beverages, morning daypart, enormous brand awareness — are very different from the economics Salad and Go was trying to make work in those same sites.

The Collapse Sequence

• September 2025: 41 locations closed — more than a quarter of the chain, most of them recently opened. This is not pruning. This is a major strategic retrenchment.

• January 2026: All remaining Texas and Oklahoma stores closed — another 32 locations. 73 total removed from the system.

• 2024: CEO Charlie Morrison departed after reported strategic disagreements with the board. The architect of the aggressive expansion left during the expansion.

• August 2026: Chapter 11 bankruptcy. Cyclospora outbreak hits the salad category, reducing industry foot traffic 3–11% during the outbreak period. For a healthy company, painful. For a company already carrying $1 billion in obligations on a shrinking revenue base, the final blow.

The Cyclospora outbreak didn’t cause the bankruptcy. By the time it hit, the company had already closed 73 stores, exited two states, changed leadership, hired restructuring advisors, laid off corporate personnel, and renegotiated vendor contracts. The system was already broken. The outbreak exposed how little cushion remained.

The Four Types of Proof Salad and Go Didn’t Have in Texas

The lesson here isn’t “don’t grow too fast.” It’s more specific than that.

1. Economic proof in the new market. The $2M AUV wasn’t a Salad and Go fact, it was an Arizona fact. The company never established whether those economics were reproducible in a market where none of the conditions that created them existed.

2. Geographic proof. Does the concept produce results in a market where the brand is unknown? For a format 100% dependent on drive-by recognition, this is not a minor variable.

3. Brand proof. How long does it take to build customer habit in a blank-slate market? How much marketing investment does that require? At what point do the economics turn? These questions needed answers before 73 stores were committed.

4. Infrastructure proof. Can supply chain, training, QA, HR, IT, and regional management scale at the pace of unit growth? At 50 Phoenix stores, problems can be solved manually. At 140 stores across four states opening at one per week, a bad supplier affects an enormous number of restaurants simultaneously.

The founders understood this. They said so. They argued for deliberate, managed growth. The investors wanted scale, fast.

What This Means at Any Scale

You don’t need to be a PE-backed national chain to make this mistake.

An operator with 3 proven units in one city sees an opportunity to open 2 more in a neighboring market. The economics in the home market are strong. The assumption is that they’ll transfer. They sign the leases before proving they will.

The new locations ramp slowly. The fixed costs are the same. The home market units can’t carry the combined overhead. The operator is suddenly holding obligations their proven stores can’t support.

Growth without proof isn’t ambition. It’s a liability — at $1 billion and at $1 million.

Your economics aren’t the asset. The conditions that create your economics are the asset. Brand recognition. Customer habit. Supply chain efficiency. Operational experience. None of those transfer automatically. All of them have to be proven in each new market before you commit the fixed costs to that market.

The Question to Answer Before You Sign Anything

• Do your unit economics work in this specific market — or are you assuming they’ll transfer from a market where the conditions are different?

• Have you proven the concept where your brand isn’t known?

• Do you have a realistic ramp model for the new market, and can your proven stores carry the fixed costs during that ramp?

• Can your operating infrastructure — supply chain, training, QA, management — actually support the pace of expansion you’re committing to?

If you can’t answer all four with real evidence, not assumptions, you’re not ready. That’s not a judgment. It’s the information you need before you commit.

To learn more about scaling readiness check out the 4 scaling self assessment at weknowhow.pro.  Each assessment focuses on specific areas that are critical to scaling your restaurant business.