Looks like your coffee beans got a little more toasted than you wanted.
D.C.-based Compass Coffee has filed for Chapter 11 bankruptcy protection as it restructures parts of its business to stabilize operations.
The company said all cafes will remain open and operating throughout the process.
The move comes as the District’s retail and office landscape continues to struggle with post-pandemic shifts. Compass said legacy lease structures and fixed operating costs no longer align with current consumer demand.
As part of the restructuring, Compass will close its Ivy City roasting facility. The company said the facility was designed for a level of production that no longer matches the current retail environment, adding that operating a large-scale manufacturing site within the city is incompatible with current economic realities. The closure is intended to protect Compass’ core neighborhood cafe business.
According to The Washington Post, Compass owes $1.3 million in unpaid rent.
Restaurants and cafes across D.C. — from national chains to local institutions — are facing rising costs, reduced foot traffic and structural changes tied to remote and hybrid work.
The Chapter 11 process, the company said, provides a pathway to adapt while continuing day-to-day operations.
“As a fourth-generation Washingtonian, I started Compass to build something meaningful for this city,” said Michael Haft, the company’s co-founder and CEO.
“The decisions we’re making reflect the reality of this moment in Washington and allow us to keep serving the city with the same sense of community that has defined Compass from the beginning.”
Co-founder Harrison Suarez had a different take on LinkedIn.
“In 2013, I co-founded Compass Coffee with my close friend from the Marines. In July 2021, after years of hard work and while I was out of the country, my co-founder and his father forcibly exited me from the company and refused to compensate me for my equity,” he wrote in a post on the platform.
He filed a lawsuit against Haft, alleging a yearslong pattern of fraudulent business activity in a court filing.
Founded more than a decade ago, Compass Coffee has grown to 25 cafes across the D.C. area.
The company said it has supplied coffee to the White House, supported local community initiatives and recently helped serve more than 12,000 furloughed federal workers free drinks and food.