A regenerative farmer and restaurateur which closed several of its California restaurants is now facing the possibility of closing its two remaining locations.

Mollie Engelhart, owner of Sage Regenerative Kitchen, said that despite her continued efforts to keep her restaurants afloat, they are “hanging by a thread.”

“I don’t feel like we can hold on because I don’t have any more assets to literally liquidate, to keep us above ground and above water,” Engelhart told FOX Business . Engelhard said she and her husband “tapped into everything,” including their retirement and their home, in hopes that things would improve.

“I sold many other assets trying to keep the company afloat, believing that there would be a change, that there would be a time when ‘okay, we can get back to a steady flow of guests, we can return to normal life,” he added. “and it just hasn’t recovered that way,” she added.

Its latest two locations are located in Pasadena and Echo Park, both in the Los Angeles area.

CALIFORNIA FAST FOOD WORKERS DEMAND MORE PAY

Engelhart said a combination of factors in recent years have made financial recovery nearly impossible.

Sage Restorative Kitchen by Mollie Engelhart in Los Angeles. (Mollie Engelhart)

Engelhart explained that as business was going recovery after the pandemica series of strikes began in Hollywood, notably among the Writers Guild and the Screen Actors Guild. This hit the restaurant hard, as many people working in the film industry had to cut back on expenses.

After the strikes ended, those clients were still trying to recover financially, she said. Add to that rising costs due to inflation and increases in the minimum wage, she added.

THE MINIMUM WAGE EFFECT OF FAST FOOD: HIGHER PRICES, REDUCED HOURS

Mollie Engelhart at Sovereignty Ranch in Texas. (Mollie Engelhart)

Under the state’s new minimum wage law that took effect in April, pay increased from $16 to $20 an hour for restaurants with at least 60 locations nationwide, except those who make and sell their own bread. Even though Engelhart didn’t fall into this category, she was still affected. She argued that it’s not just fast food establishments that have to pay more; all types of restaurants, including fine dining and casual restaurants like his, now have to compete for workers.

“I want more than anything for this to work. I’ve missed thousands of hours with my kids, birthday parties, weddings and all kinds of things to build this business,” Engelhart said. “Now I’m losing them because I can’t seem to pay my salary. I never imagined I would be here.”

Sage Restorative Kitchen by Mollie Engelhart in Los Angeles. (Mollie Engelhart)

Before the pandemic, Engelhart said his five restaurants generated a combined $20 million in revenue and employed 350 people. Today, its revenue is down to about $4 million and it has reduced its workforce to about 50 employees. It now has a general manager and a chef who oversee its last two locations.

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The barn at Sovereignty Ranch in Texas. (Mollie Engelhart)

In addition to reducing the number of employees, Engelhart expanded his once-vegan-only menu with meat from his Texas ranch “hoping it would bring more butts to the restaurant.”

“We’ve evolved in so many different ways throughout the pandemic, from creating a grocery section, to making frozen meals, to making family meals,” she recalls.

The barn at Sovereignty Ranch in Texas. (Mollie Engelhart)

Engelhart still hopes things improve in California. For now though, Engelhart and her husband are focused on boosting business at Sovereignty Ranch in Bandera, Texas.

They purchased the land in 2020 and transformed it into a hotel ranch, a regenerative farm and, most recently, a restaurant called The Barn.