Ayr Muir founded Clover with one food truck near MIT and spent 15 years turning it into one of Greater Boston’s best-known fast-casual chains. On Tuesday, after two years watching from afar as the company filed for bankruptcy and then later emerged from it, Muir said he found out that restaurant operations were suddenly shutting down this week — through an email, that was sent to board members.
“I’m devastated,” said Muir, whose only remaining connection to the company is being a minority shareholder and board member.
To Muir, the email represented the end of an experiment he began in 2008 with a single food truck and a dream to disrupt Boston’s food scene by serving millions of sustainable, vegetarian meals as efficiently as a burger joint.
Clover rode a rising trend of health-conscious dining into a rapid expansion, opening dozens of brick-and-mortar stores throughout the region. But as interest in meat alternatives faded in recent years, the company was unable to maintain its lofty vision.
On Tuesday, Clover’s executives it would close its 12 remaining quick-serve restaurants and kiosks for good at the end of business on Thursday after more than 17 years.
Changing consumer tastes were only one factor in the collapse. Muir and the company’s current management team blamed Clover’s demise on a restaurant economy that has been reshaped by remote work, inflationary prices, and rising operating costs that have affected all of Boston.
But Clover’s demise, investors say, was foreshadowed for years. Documents show a visionary company squeezed by mounting financial pressures as management focused on growth.
Ingredient costs, the company said in a newsletter to customers on Tuesday night, are 30 to 50 percent more now than just two years ago.
“Our local farms are raising their prices,” Clover chief executive Julia Wrin Piper, who has led a turnaround she said has represented a “steady march toward sustainable profitability.” “We simply can’t keep up with inflationary pressures.”
About 170 people will lose their jobs, and leave a hole in the city’s restaurant scene for diners.
“It really seemed like the future of food,” said Kelly Andreoni, a longtime vegetarian and Clover fan starting in its early days. She recently returned and found the experience disappointing. The restaurant was dirty, she said, and quality wasn’t there. “We knew it wouldn’t be long before they closed.”
Justin Alpert, a Boston University professor and restaurant architect, said he regularly went to Clover for falafel. When other fast casual chains popped up that served similar food, ingredients weren’t from local farms, he said.
“Unfortunately, sustainable practices and use of quality products come at a literal cost,” said Alpert. “They chose to go down with that ship in lieu of selling out.”
Muir exited as CEO in late 2023. (He said he resigned; Piper said he was terminated.) A month later, the company filed for bankruptcy protection — emerging the following year with what it described as a clean slate and a desire to open even more stores.
Documents filed in bankruptcy court showed Clover had about $792,000 in listed assets and about $3.85 million in liabilities. It didn’t own any of its restaurants’ real estate, and a meaningful chunk of what the company still owned — roughly $253,000 at the time — was in food and supplies.
The startup could no longer pay the leases on its new commissary in Hyde Park and several of its restaurants. It had raised $1.8 million earlier in 2023, cut payroll by 43 percent, and unsuccessfully tried to renegotiate its leases. Management also failed to secure a second round of funding that August.
Ron Shaich, the founder of Panera Bread and a Brookline native, was an early investor in Clover. When reached by text, Shaich was blunt about its demise: “I walked away many years ago from the investment when I lost faith in management and the board’s capacities, focus and decision making.”
“The results speak for themselves,” said Shaich, now a major investor whose portfolio has included fast-growing chains such as Cava and Tatte Bakery & Café.
John Pepper, who founded local fast-casual chain Boloco in 1997 and was also an early Clover investor, said he foresaw Clover’s end when he sold his shares at a 50 percent discount at a loss in 2019.
“Am I surprised? No. The structural issues were visible years ago,” said Pepper, who pointed to real estate and overhead costs as some of Clover’s biggest problems. It leased expensive storefronts that needed high volumes to work. That’s “fine when you’re growing, and have exceptionally strong-stomached backers — such as McDonalds for Chipotle — but brutal when you’re don’t have those things and things don’t go exactly according to plan."
Clover’s overhead, he said, was carrying a much bigger company than the one that actually existed.
“Once growth stalled, the math stopped working and the cuts came too slowly,” said Pepper.
Coming out of the pandemic, workers were slow to return to the office, which led to a decline in corporate catering and lunch sales. At the same time, “the cost of labor literally doubled, the cost of utilities doubled, real estate taxes in the city doubled, rents continued to escalate every year,” said Muir. “Restaurateurs find themselves with many more expenses than they ever had but less sales than they ever had.”
“It’s a difficult equation to make it all work,” he added.
Clover’s management had hoped to find a buyer that could keep some or all of the business going. Some of those conversations remain ongoing with what Muir described as a mix of potential buyers. He and Piper declined to name any of the parties.
“We are actively having these conversations that we have hope around ... especially now with the news out,” said Piper, who said she was brought in to replace Muir in 2023 because the company was facing imminent liquidation. “The company has survived a lot of hard periods, one of them we’re grappling with now.”
Piper said she informed Clover’s board, which Muir sits on, last week that “in order to operate responsibly, we had to wind-down operations.”
Muir said it was not until this week that he learned the details of when stores would actually shut down permanently.
“I didn’t know I couldn’t eat at a Clover restaurant this coming weekend until just a few days ago,” Muir.
Megan Pileggi, Clover’s former director of human resources and development, said she was attracted to the company’s mission of sourcing from little-known local farmers.
“I really believed in it,” said Pileggi. “We all felt like we were part of something much bigger than ourselves.”
But she also saw the problems before leaving in 2019 after nearly 10 years: “We were really trying to ramp things up to go into a new markets, and like, that was an investment that wasn’t right for us.”
In August 2023, Clover closed its Copley Square. At the time, management said it was Clover’s poorest-performing location, losing $350,000 annually over the past few years. Its rent was also $350,000 a year.
Clover’s shuttering also comes as consumers move away from plant-based foods and artificial meats to focus on real meats and dairy.
Matthew Britt, a culinary professor at Johnson & Wales University, compared the restaurant industry to a roller coaster. “Things come up and down. The same goes for plant-based dining.”
“It makes you wonder if Clover got too big,” added Britt.
Muir said in 2014 that he expected Clover to one day be “more profitable than Chipotle and bigger than McDonald’s.”
On Tuesday, Muir didn’t backpedal.
“That was the ambition for the project that Clover was. That was what the world needed,” said Muir, now the CEO of El Nacho, a tortilla chip manufacturer in Waltham. “I wish we had more success getting to that.”
Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her @alexagagosz and on Instagram @AlexaGagosz.