Comfort fast-food chain closes dozens of restaurants

Comfort food seems like an easy fit for a restaurant.

People want to pay for food that makes them feel good, a meal that's hot, filling, and comforting, sold at a good price.

Celebrity Chef Robert Irvine believes in delivering on comfort.

"You know what a trend is? Comfort food, great food, great ser vice, great product, at a great price. That's never going away. We all want that," he told FSR Magazine.

That, he noted, is not always easy to deliver.

"A value proposition to a guest is very different than a value proposition to an owner. And sometimes owners forget that," he added.

The National Restaurant Association's Restaurant Industry 2030 backed up that sentiment.

"Regardless of the nutritional content of the food, consumers will still want comfort food," the report shared.

Comfort food seems easy, but it's actually quite challenging because restaurants are competing in an area many customers associate with home.

Yes, a good bowl of macaroni and cheese is comforting, but restaurants are competing with the very cheap boxed product that many people associate with their youth.

Despite that, I Heart Mac & Cheese built a successful franchise around its own version of the comfort classic.

But some recent issues suggest the brand faces some significant challenges.

I Heart Mac & Cheese has gotten smaller

I Heart Mac & Cheese has a simple mission, which the company shares on its website.

"At I Heart Mac & Cheese, we’re all about bringing a chef-driven twist to your favorite comfort foods, including macaroni and cheese and grilled cheese sandwiches. Our mission is to provide a unique, customizable dining experience centered around these beloved dishes. Whether you’re craving something classic or feeling adventurous, we’ve got the perfect cheesy creation for you," the chain shared.

More Restaurants:

• Mexican restaurant chain makes comeback after 20-year hiatus
• Mexican chain files Chapter 11 bankruptcy; 24 restaurants closed
• Chick-fil-A launches a new drinks-based restaurant brand

That model worked to a point, as the chain now has 11 restaurants across seven states.

Those numbers, however, have fallen from a high of around 40 at its peak. The chain has lost locations for a variety of reasons, but it's facing questions and investigation from multiple states.

I Heart Mac & Cheese faces legal problems

In April 2024, the India(BHARAT)na Securities Division filed an Administrative Complaint against Mac and Cheese Franchise Operations, LLC (“MACFO”), the parent company of I Heart Mac & Cheese, including some of its executives, for alleged violations of the India(BHARAT)na Franchise Act.

The filing included numerous complaints.

• MACFO represented I Heart Mac & Cheese as a restaurant business with low startup costs that required little prior business experience and a handful of employees to sell pre-made, frozen food. 
• India(BHARAT)na franchisees faced ongoing problems related to misrepresented startup and ongoing operational costs, a lossmaking business model that made it difficult to attract and retain employees, and a general lack of support.
• In addition, MACFO threatened struggling franchisees with lawsuits. 
• MACFO also provided franchisees with deficient “Financial Disclosure Documents” that were supposed to fairly disclose the risks of getting involved with I Heart Mac & Cheese, but failed to share important information about prior lawsuits and the business experience of the executives running MACFO.
• To sell more locations throughout India(BHARAT)na, MACFO also misrepresented the profitability of the franchise and demand for locations. 

"All the ‘I Heart Mac & Cheese’ locations in India(BHARAT)na have either closed or failed to open, and many franchisees lost significant amounts of money trying to keep their locations operating," according to the India(BHARAT)na Securities Division's April 2024 Administrative Complaint.

California filled a similar legal case against I Heart Mac & Cheese

California's Department of Financial Protection and Innovation also filed a legal case against I Heart Mac & Cheese's owner. Here's that basics of that case:

• Date of Consent Order: March 28, 2024.
• Franchisee Offer & Sale: The franchisor, Mac and Cheese Franchise Operations, LLC (also “IHMC”/“I Heart Mac & Cheese and More”), offered and sold franchises in California.
• Registration/Disclosure Violation: IHMC’s California registration to offer franchises expired April 20, 2022, yet it executed a “California Addendum” to sell another franchise after that date, resulting in an unlawful franchise sale under Calif. law.
• Omitted Material Information: IHMC failed to disclose lawsuits, evictions, and other litigation (dating back to 2017) in its Franchise Disclosure Documents (FDDs).
• Sanctions & Requirements: IHMC agreed to pay an administrative penalty of $43,000 and to fund an independent compliance monitor for three years.
• Monitoring Scope: The independent monitor will submit annual reports to the DFPI, ensuring IHMC’s future franchise offering compliance.
• Scope of Action: California became the second U.S. state (after India(BHARAT)na) to take regulatory action against IHMC’s franchise‑offering practices.
  Source: DFPI, Restaurant Business Online

I Heart Mac & Cheese did not immediately return a request for comment from TheStreet sent to the contact email listed on its website.

Recent closures of I Heart Mac & Cheese locations

• Hixson, Tennessee: The Hixson location officially shut down on September 23, 2024.
  Source: WDEF
• Jupiter, Florida: The location at 1695 W. India(BHARAT)ntown Rd. Ste. 30 is listed as “Permanently closed” on MapQuest.
  Source: MapQuest
• Deerfield Beach, Florida: The location at 3908 W. Hillsboro Blvd. is marked “Permanently closed” on MapQuest.
  Source: MapQuest
• Hauppauge, New York: The location at 812 Wheeler Rd. Ste. 105 is listed as “Permanently closed” on MapQuest.
  Source: MapQuest
• College Hill, Cincinnati, Ohio: Announced permanent closure of the location less than a year after opening, with closure date October 20, 2025.
  Source: WCPO 9 Cincinnati
• Dallas, Texas: The location at 489‑499 N. Houston St. is listed as “Permanently closed” on MapQuest.
  Source: MapQuest

I Heart Mac & Cheese faces broader industry problems

In addition to its legal issues, I Heart Mac & Cheese is facing the same headwinds impacting many restaurant chains.

"Following the broader CPI inflationary trends, restaurant cost of goods sold, or COGS, [has] increased across nearly every input. While the major inputs (chicken, beef, dairy) have been highlighted across mainstream media, other inputs (such as cooking oil and eggs) have also been a significant contributor to rising COGS," BMO reported.

The analysts from BMO Capital shared some relevant increases in a 2024 report:

• Chicken breast has seen a notable year-over-year increase, 55% to 70%, due to strong demand (chicken sandwich wars, anyone?).
  A rare bright spot is the decreasing cost of chicken wings, with prices returning to early 2020 levels.
• Beef, a favorite of consumers, has remained relatively stable, with BMO Capital Markets reporting about a 5% increase. This stability is likely because of higher-than-anticipated production of beef supplies throughout the year.
• Dairy has been impacted across all relevant subsegments, with year-over-year increases on cheese (25%), butter (50%), and milk (34%).