True Food Kitchen Had $2.2M MCA Balance With Parafin Before Bankruptcy

FRC Balance, LLC, which owns the True Food Kitchen restaurant chain, filed for bankruptcy this week. According to the company, True Food Kitchen has closed 12 restaurants, whose final day of service was Sunday, October 4. The company’s remaining 34 restaurants across 14 states are open and serving guests as usual.

Among the company’s listed creditors is Parafin, with an outstanding merchant cash advance balance of $2,206,502 reported in one of the bankruptcy filings. There is no indication that the MCA added to the company’s financial pressure (True Food Kitchen owes millions just to its food vendors alone, for example, and they cited organizational issues as the root cause). The balance is notable, however, for its size and for how the arrangement originated: through DoorDash Capital. deBanked was one of the first to discover DoorDash’s entry into MCAs in January 2022.

True Food Kitchen has been a poster child for DoorDash Capital since last year. In July 2025, DoorDash published a feature about the restaurant chain’s use of merchant cash advances. Titled How True Food Kitchen Used DoorDash Capital to Fuel Expansion, it opens by saying: “In September 2024, Peter Koumas, True Food Kitchen’s CFO, found DoorDash Capital while exploring the restaurant’s Merchant Portal, right as True Food Kitchen was in the middle of an exciting expansion phase, opening two new locations in Scottsdale, AZ, and Raleigh, NC.”

At the time, 10% of True Food Kitchen’s overall revenue came through DoorDash. The feature also noted that DoorDash Capital MCAs were provided by Parafin. In its bankruptcy filings, True Food Kitchen also listed a $1.8 million “MCA” balance with Rewards Network and a $7.1 million balance with InKind Credit, alongside debts to more traditional creditors.

Just a week ago, Parafin announced that it had been sold to Stripe for an undisclosed amount. It also revealed that it had originated $3 billion in funding since its inception in 2021. Until then, the scale of Parafin’s funding activity had been largely unknown. The True Food Kitchen bankruptcy now offers a glimpse of how large its exposure to a single client could be.

Counsel for the debtors said during a bankruptcy court hearing that they planned to reject Parafin’s contract and the payments towards it. True Food Kitchen blamed a combination of management turnover, changes in expansion strategy, failed investments, and product/branding issues as the reasons for its predicament.