By Becky Yerak | Chicago-based Berry Chill LLC, one of at least four operators that debuted here in 2008 as the frozen yogurt industry enjoyed a resurgence, has filed for Chapter 11 bankruptcy, saying it signed some “bad leases” and needs to reorganize.
Berry Chill began operations in March 2008. Its locations include its first and flagship location at 635 N. State St., as well as 132 N. LaSalle St., and Ogilvie Station at 500 W. Madison.
Michael Farah, chief executive, founder and self-described “Yogurteur,”
said he wants to bring in new investors but to do so needs “to clean
the slate a little bit with some of our issues.”
The company signed some bad leases, “that’s the biggest thing,” said Farah,
a former commodities trader. “We didn’t open up the right locations.”
Its State Street location is “amazing,” he said. Berry Chill has
claimed to serve more than 1,000 people a day at that location, which
hosted viewing parties of the 2008 presidential debates on its four
32-inch plasma TV screens. The company has said its LaSalle location is
larger and includes outdoor seating, laptop stations and free Wi-Fi.
Last year, Advertising Age, a trade publication, featured Berry Chill
in an article about small businesses that were effectively using
Twitter, the microblogging service.
“Our business is nighttime and weekend business, and our other
locations are in the Loop and aren’t open at night and on the
weekends,” he said. “To expand we have to restructure the company.”
Berry Chill has 50 to 99 creditors, according to its bankruptcy filing made Monday
in U.S. Bankruptcy Court in the Northern District of Illinois. It has
$1 million to $10 million in assets and $1 million to $10 million in
liabilities, documents show.
Its biggest unsecured creditors include law firm Drinker Biddle, owed
$447,078, for various legal services; the Illinois Department of
Revenue, a sales tax claim for $308,985; American Express, $54,695, for
start-up and operating expenses; Marc Realty, $39,306 for State Street
property rent; Gold Realty LLC, $26,000, for Belmont location rent;
Merchandise Mart LLC, $20,040, for Merchandise Mart rent; and UST-GEPT
JV LP, Citigroup Center, $45,489, for Ogilvie rent.
He declined to name the new investors he’d like to bring in.
An August 2009 Chicago Tribune article said he was expecting to double
his sales from $3 million in 2009 to $6 million in 2010, while a 2008 Crains
article said he was hoping to expand into four more cities by 2009.
Maybe not the best guy to invest in. Did he not see the downside of the locations when he was selecting them? Did he do ANY research?
$447,000 for legal services? locations that don’t match his target market?
Seems pretty stupid they never opened in the neighborhoods where people would be LINING UP after dinner…but…whatever, I’m not a businessman. I’m just a girl who likes ice cream.
This was the headline I expected to see when the stores opened in 2008. Their store at Olglivie Transportation Center offered very little product for a huge price. Not only could they not hit their target market, they never got near their price point. Not to mention that their “fro yo” (that is annoying) tasted sour.
$447,000 for legal services is not abnormal for a delusional investor group that puts the cart ahead of the horse and thinks they will be franchising one new store a day before the product is even known to the public.
I love Berry Chill … & I hate going to the state street location because the line is always out the door. I can’t figure out why they chose to open 2 locations in the loop that aren’t even open on the weekends!!!
OPEN SOME in the city neighborhoods … if you would have done this in the first place … I feel like I could almost guarantee you wouldn’t be filing for Chapter 11. Do you research. It seems as though your target market is young 20’s and 30 somethings. MOST of us don’t live in the loop!!
berry stupid is more like it …
i agree w/those commenting on lack of neighborhood locations with evening hours …
not to mention lack of financial planning, isn’t it a general rule of thumb when starting up a business to have enough funds to operate for about 5 years? not that its always possible, but it wouldn’t make sense to be in “expansion” mode w/o the financing to back it up.
10 bucks for a large yogurt with 3 toppings and you still can’t make the business model work??? Maybe Berry Chill should come up with an extra large size and charge 20 bucks.
I was skeptical when Berry chill, was opening, but one visit and I was hooked, I’ve eaten the stuff religiously since they opened and gone from 275lbs, to 195lbs. Granted I hit the gym too, but Berry Chill is hands down my favorite place in the city, and I hope they can come out of this and be bigger and better in the future. The locations may not have been great in the first go round, but I have faith that they will right the ship, if not I’m not sure where I will go everyday.
That’s the problem when you have a former commodities trader opening up this type of business. He made all his decisions real quick without thinking long term. Now he’s paying the cost for bad judgement. Oh well, hopefully Berry Chill comes back smarter by opening stores in areas where it makes more sense with better hours.
He didn’t pay $308k in sales tax? Now I know why the excessive legal fees…
This place is very expensive, even with the prime loop locations… If you go to the west coast a large with 3 toppings would not cost you near 10bucks, (well with our highest in the nation sales tax) but still. Great toppings and nice sour kick to the yogurt, but they need to lower their price points or move to areas with cheaper rent. They should go to college areas like uic/depaul lincoln park, south loop, etc.
Yeah $400 Dyson Hand Dryers, Color Changing spoons and fancy cups, 10 LCD TVs, trying to trick ppl into their product by calling it couture, oh and charging $7 for 50 cents in product. I wonder why they went bankrupt?
This news featured on dailyjobcuts.com which shows the sad sad state of affairs in this country !!
Dear Berry Chill fan,
As you may have heard, Berry Chill filed for Chapter 11 protection today. I wanted to personally address the situation and write to all of our loyal fans.
Berry Chill is not going anywhere. In the last two years, many companies have filed for Chapter 11, and they continue to operate as normal. That is exactly what we plan on doing. Unfortunately for us, the economy has impacted us significantly, and we are forced to reorganize. This will have zero effect on our product and service.
Because of YOU, our brand and concept have been tremendously successful. We will continue to deliver the best yogurt known to man, to the most loyal customers on the planet.
The emails and messages we have received from you have touched us deeply, and it makes us feel so good to know that you are all concerned…it means we’re doing something right! We will emerge from this better than ever and continue to find ways to serve our growing fan base. There are a lot of great opportunities on the horizon that we will explore in the coming months, so please stay tuned.
The only thing I ask of you, as our loyal fan, is to continue to come out and support our business, and we will continue to support you and the rest of the community like we have done for the past two years.
I felt it necessary to write to you directly, because we owe everything we have to you.
We’ll BC-in’ Ya,
Michael Farah
Founder & CEO
Berry Chill
Whoa. First it was bad real estate (but smart Smart cars?) now above you say it was the economy. Which is it. Personally as someone who used to drive from the burbs to pick up 8 at a time, you never made it easy to transport (ice was a nice touch finally). Mostly I didn’t like the employees. They seemed distracted and not very nice. Loved the product until I realized how much sugar I was ingesting. I’ve lost 30 lbs since I stopped going. Good luck.
This place is berry sad. The yogurt is loaded with sugar and is awful for you. Not to mention costs a fortune! Surprised it didn’t go bankrupt earlier. Shame on Michael farah for screwing all of the investors and lawyers. Now he can say he declared bankrupcy and everybody knows about it. Nice job