Boloco is seeking to renegotiate leases, talking to potential buyers: ‘We are just looking for a clear path’

Of Boloco's seven restaurants, only two are currently open. The chain hopes to open the one on Boylston Street, opposite Boston Common, (above) soon.Lane Turner/Globe Staff

Boloco, the fast-casual Mexican restaurant chain, is renegotiating agreements with landlords and talking to potential buyers as the pandemic puts it on the brink of closure.

In an Oct. 9 letter to shareholders, cofounder John Pepper said the Boston company is in talks to be acquired at a discounted price that would offer no value for shareholders. The 23-year-old business is asking landlords to help it reopen some restaurants by reducing rents, or it will be forced to shut down permanently. Of the chain’s seven locations, only two ― in Lynnfield and at Boston Children’s Hospital ― have reopened since closing their doors in March.

Pepper said Thursday that the acquisition talks have not involved any national chains or big investors. Potential buyers are other small businesses looking either to partner with Boloco or to work with the privately held company to convert the restaurant spaces into something else, he said.

“People are sniffing around, and they want good deals,” Pepper said.

Pepper said that in the meantime he also is looking to pay the landlords 10 percent of sales revenue. instead of fixed rents.

“We don’t expect to have the same amount of customers, so we can’t pay the same amount of rent,” he said. “Landlords are a key piece . . . and a lot of them are stuck, too.”

He said Boloco is hardly breaking even at the two open restaurants and is not able to cover rent for the closed ones. He said he aims to open the restaurants near Boston Common and Berklee College of Music in coming weeks.

Since the pandemic began, the company has laid off about 80 employees, leaving it with a workforce of 30.

Pepper said he thinks two of the restaurants will never reopen because the “landlords either want to control the space or terminate us and replace Boloco" with a national chain.

“A national chain is a better bet for them than a regional or independent restaurant,” he said.

Pepper had been betting on another round of aid from the federal Paycheck Protection Program, although now that negotiations are on hold until after the Nov. 3 election, he is less hopeful. And he is hesitant to borrow more money elsewhere.

“Taking out new loans for a business that doesn’t have certainty for at least six to 12 months, I mean, that is foolish," he said. "We are just looking for a clear path.”

While Pepper acknowledges the situation will not end well for shareholders, since much value has been eroded by the pandemic, he said he’s more concerned about the outlook for the company’s employees and the communities where it does business.

In a message to the Globe, he said: “It’s a friends and family business now. We bought out the professional investors in 2015. I personally own over 85% so [who’s] on the hook is mainly me and my wife.”

But, he added, “The people we need to worry about are front-line workers and people who have given me 15 or 20 years. I’m helping some of them do their resumes to accelerate their path to better jobs.”